“If you have any query about this document, you may consult issuer, issue mangers and underwriters”
PROSPECTUS
OF
BANGLADESH STEEL RE-ROLLING MILLS LIMITED Registered & Corporate Office: Ali Mansion, 1207/1099 Sadarghat Road, Chittagong, Bangladesh Phone:+880 (31) 2854901-10, Fax:+ 880 (31) 610101, Web: www.bsrm.com
Public offering of 17,500,000 ordinary shares of Tk. 10/- at an issue price of Tk. 35/- each are including premium of Tk. 25/- per share totaling of Tk. 612,500,000/-
Opening date for subscription: February 01, 2015 Closing date for subscription: February 05, 2015 For Non-Resident Bangladeshis subscription closes on: February 14, 2015
Manager to the Issue
Rahman Chamber (3rd floor), 12-13 Motijheel C/A Dhaka- 1000, Tel: +880 (2) 9515468, 9515469 Fax: + 880 (2) 9515467, Web: www.allfin.org
Underwriters GSP Finance Company (Bangladesh) Limited Trust Bank Investment Limited 1/C, Paribagh, Mymenshing Road, Peoples Insurance Bhaban(12th Floor), Ramna, Dhaka-1000 36 Dilkusha C/A, Dhaka-1000
BD Finance Capital Holdings Limited 64 Motijheel Comercial Area , 2nd Floor, Dhaka-1000
Credit Rating Status Long Term Short Term Entity Rating AA- ST-2 Date of Validity 20 May, 2015 20 November, 2014 Rating Assigned By Credit Rating Information and Services Ltd. (CRISL)
Issue Date of the Prospectus: December 29, 2014
The Issue shall be placed in “N” Category
“CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITER AND/OR AUDITOR”
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Availability of Prospectus
Prospectus of Bangladesh Steel Re-Rolling Mills Limited may be obtained from the Issuer Company, Issue Managers, Underwriters and the Stock Exchanges as follows:
Name & Address Contact Person Telephone Number The Issuer
Bangladesh Steel Re-Rolling Mills Limited Mr. Shekhar Ranjan Kar, FCA Registered & Corporate Office: +880 (31) 2854901-10 Ali Mansion, 1207/1099 Group CFO & Company Secretary Sadarghat Road, Chittagong.
Dhaka Office: Mr. Muhammad Ashiqur Rahman Mahbub Castle, 2nd & 4th Floor ACA +880 (2) 8311994, 35/A Purana Paltan Line, VIP Road, Lead (Compliance & Accounts - 8313119, 9358135 Dhaka-1000 Dhaka) Manager to the Issue
Alliance Financial Services Limited Ms. Amita Podder rd +880 (2) 9515468-9 Rahman Chamber (3 floor) Manager 12-13 Motijheel C/A, Dhaka- 1000
Underwriters
BD Finance Capital Holdings Limited Mohammad Ahsan Ullah +880 (2) 9588186-1 Baitul Hossain Building (2nd floor), 27 Dilkusha C/A, Managing Director & CEO Dhaka-1000
GSP Finance Company (Bangladesh) Limited Toaha Muhammad 1/C, Paribagh, Mymenshing Road, Ramna, Dhaka-1000 GM & Chief Operating Officer (MBU) +880 (2) 9674306
Trust Bank Investment Limited A.M.Ashfaque Bari Nahid
Peoples Insurance Bhaban(12th Floor),36 Dilkusha C/A, Assistant Vice President +880 (2) 9570261 Dhaka-1000
Stock Exchanges
Chittagong Stock Exchange Limited +880 (31) 714632-3 CSE Library CSE Building, 1080 Sheikh Mujib Road, +880 (31) 720871-3 Agrabad, Chittagong-4100
Dhaka Stock Exchange Limited DSE Library +880 (2) 9564601-7 9/F, Motijheel C/A, Dhaka-1000
Prospectus is also available on the websites www.secbd.org, www.bsrm.com, www.allfin.org, www.dsebd.org, www.csebd.com and Public Reference room of the Bangladesh Securities and Exchange Commission (BSEC) for reading and studying.
NAME & ADDRESS OF THE AUDITOR
Rahman Rahman Huq Chartered Accountants 102 Agrabad Commercial Area Chittagong, Tel: +880 (31) 710704, 710996 Fax: +880 (31) 2520795
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Definition and Elaboration of the Abbreviated words and Technical terms used in the Prospectus
Term Description AGM Annual General Meeting Banker to the Issue Banks so named in the prospectus to collect money as subscription against security BO A/C Beneficiary Owners Accounts BSRM Bangladesh Steel Re-Rolling Mills Limited BSRM Group BSRM Group of Companies BSRMS BSRM Steels Limited BMRE Balancing, Modernization, Rehabilitation & Expansion BSRMSML BSRM Steels Mills Limited BPDB Bangladesh Power Development Board BSEC Bangladesh Securities and Exchange Commission CDBL Central Depository Bangladesh Limited CIB Credit Information Bureau of Bangladesh Bank CSE Chittagong Stock Exchange Limited CPCL Chittagong Power Company Limited DSE Dhaka Stock Exchange Limited EGM Extra-Ordinary General Meeting EPS Earnings Per Share EOI Expression Of Interest ERP Enterprise resource planning Initial Public Offering Means first offering of security by an issuer to the general public KVA Kilo Volt Amperes Manager to the Issue Alliance Financial Services Limited MEW Meghna Engineering Works Limited MT Metric Ton NAV Net Asset Value Non-Resident An expatriate Bangladeshi or who has dual citizenship or possesses a foreign passport Bangladeshi (NBR) bearing an endorsement from the concerned Bangladesh Embassy to the effect that no visa is required for him to travel Bangladesh Offering Price Price of the shares of Bangladesh Steel Re-Rolling Mills Limited Prospectus A document prepared for the purpose of communicating to the general public an issuer's plan to offer for sale of its security under the prescribed Regulations Public Issue Public issue of security through Initial Public Offering PGCB Power Grid Company of Bangladesh RJSC Registrar of Joint Stock Companies & Firms Securities Shares of BSRM SMW Steel Melting Works VAT Value Added Tax IDCP Interest During Construction Period
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TABLE OF CONTENTS Particulars Page No 6-13 SECTION I: STATUTORY CONDITION Disclosure in respect of issuance of securities in demat form 6 Conditions under section 2CC of the securities and Exchange ordinance, 1969 6 General Information 13 SECTION II: DECLARATIONS AND DUE DILIGENCE CERTIFICATES 14-16 Declaration of the Directors including the CEO of Bangladesh Steel Re-Rolling Mills Limited 14 Consent of the Director(s) to Serve as Director(s) 14 Declaration about Filing of Prospectus with the Registrar of Joint Stock Companies & Firms 15 Due Diligence Certificate of Manager to the Issue 15 Due Diligence Certificate of the Underwriter(s) 16 SECTION III: RISK FACTORS & MANAGEMENT’S PERCEPTION ABOUT THE RISKS 17-21 SECTION IV: CAPITAL STRUCTURE & PURPOSE OF PUBLIC OFFERING 22-24 Capital Structure of the Company 22 Use of IPO Proceeds and Stages of Utilization 23 SECTION V: DESCRIPTION OF BUSINESS 25-38 Background of the Project 25 Nature of Business 27 Principal Products and Services 27 Group Profile 28 Strength of BSRM 30 Market for the Products or Services of the Company 31 Relative Contribution to Income 31 Associate, Subsidiary/Related Holding Company 31 Distribution of Products or Services 31 Manufacturing Process 33 Competitive Conditions in the Business 35 Sources and Availability of Raw Materials and the Names of Principal Suppliers 35 Sources of and Requirement for Power, Gas and Water 36 Customers/Dealers who Purchase 10% or more of the Company‟s Products 37 Contract with Principal Suppliers and Customers 37 Material Patents, Trademarks, Licenses or Royalty Agreements 37 Employees Position 38 Production Capacity and Current Utilization 38 SECTION VI: DESCRIPTION OF PROPERTY 39-40 SECTION VII: FINANCIAL CONDITION AND PLAN OF OPERATION 41-48 Internal and External Sources of Fund 41 Material Commitment for Capital Expenditure & Sources Of Fund 41 Causes for any Material Change from Period to Period 41 Seasonal Aspect of the Company‟s Business 42 Known Trends, Events or Uncertainties 42 Changes In The Assets to Pay Off Liabilities 42 Loan taken from or given to the Holding/Parent Company or Subsidiary Company 42 Future Contractual Liabilities 42 Future Capital Expenditure 42 VAT, Income Tax, Customs Duty or Other Tax Liability 43 Operating lease during last five years 45 Finance lease commitment during last five years 45 Personnel Related Schemes 45 Breakdown of Issue Expenses 46 Revaluation of Assets 46 Transaction with Subsidiary/Holding Company or Associate Companies 47 Auditors‟ Certificate Regarding any Allotment of Shares to Promoters or Sponsor Shareholders 48 for any Consideration other than in Cash Material Information Having an Impact on the Affairs of the Company 48 SECTION VIII: DIRECTORS AND OFFICERS 49-57 Information Regarding Directorship 49 Involvement of Directors with Other Companies 49 Page | 4
Family Relationship Between Directors and Officers 50 Short Bio-Data of the Directors 50 Credit Information Bureau (CIB) Report 51 Description of Senior Executives and Department Heads 52 Involvement of directors and officers in certain legal proceedings 52 Certain relationships and related transactions 53 Executive compensation 53 Options granted to directors, officers and employees 53 Transaction with the directors and subscribers to the memorandum 54 Tangible assets per share 54 Ownership of Company‟s Securities 55 Shareholding Structure for 5% or More 57 Securities Owned by the Officers 57 SECTION IX: FEATURES OF INITIAL PUBLIC OFFERING (IPO) 58-62 Determination Of Offering Price 58 Market for the Securities Being Offered 59 Declaration about Listing of Shares with the Stock Exchange(s) 59 Trading and Settlement 59 Description Of Securities Outstanding Or Being Offered 59 Debt Securities 60 SECTION X: ALLOTMENT, SUBSCRIPTION AND MARKET 63-72 Lock-In On Sponsors' Shares 63 Refund Of Subscription Money 69 Subscription by and Refund to Non-Resident Bangladeshi (NRB) 69 Availability of Securities 69 Application for Subscription 70 SECTION XI: PLAN OF DISTRIBUTION 73-74 Underwriting of Shares 73 Principal Terms and Conditions of Underwriting Agreement 73 Underwriter‟s Right to Represent in the Board of Directors of the Company 74 Commission for Underwriters 74 Right of Underwriters on Company‟s Board 74 Officer or Director of the Underwriters Acting as Director of the Company 74 SECTION XII: MATERIAL CONTRACTS AND OTHERS 75-75 Issue Related Contract 75 Manager to the Issue 75 Commission to the Banker to the Issue 75 SECTION XIII: CORPORATE DIRECTORY 76-76 SECTION XIV: AUDITOR’S REPORT AND RELATED CERTIFICATES 77-127 Audited Financial Statements 77 Auditors report under section 135(1), Para 24(1) of part II of schedule III to Companies Act, 1994 122 Auditor Certificate on Various Accounting Ratios 125 Information as required by para 15 of SEC's notification no. SEC/CMRRCD/2008/186/115/ 126 Admin/30; dated October 05, 2011 Auditors‟ additional disclosure on revaluation of fixed assets of BSRM 127 SECTION XV: CREDIT RATING REPORT 128-139 SECTION XVI: APPLICATION FORMS 140-157 Additional Disclosures and Clarifications by Management 158 Additional Disclosures and Clarifications by Auditor’s 159
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SECTION I
STATUTORY CONDITION
Disclosure in Respect of Issuance of Security in DEMAT Form
As per provision of the Depository Act, 1999 and regulations made there under, shares will only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Limited (CDBL) system and any further issuance of shares (right/bonus) will be issued in dematerialized form only.
Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969
PART–A
1. The Company shall go for Initial Public Offer (IPO) for 17,500,000 ordinary shares of Tk.10.00 each at an issue price of Tk.35.00 each totaling Tk.612,500,000.00 (sixty one crore twenty five lac) following the Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations made there under.
2. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in 4 (Four) national daily newspapers (two in Bangla and two in English), within 5 (Five) working days of issuance of the consent letter. The issuer shall post the full prospectus, vetted by the Bangladesh Securities and Exchange Commission, in the Issuer’s website and shall also put on the websites of the Commission, Stock Exchanges, and the Issue Manager(s), within 5 (Five) working days from the date of issuance of this letter and shall remain posted till the closure of the subscription list. The Issuer shall submit to BSEC, the Stock Exchanges and the Issue Manager(s) a diskette containing the text of the vetted prospectus in “MS -Word” format.
3. Sufficient copies of prospectus shall be made available by the Issuer so that any person requesting a copy may receive one. A notice shall be placed on the front of the application form distributed in connection with the offering, informing that interested persons are entitled to a prospectus, if they so desire, and that copies of prospectus may be obtained from the Issuer and the Issue Manager(s). The subscription application shall indicate in bold type that no sale of securities shall be made, nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus has been published.
4. The Company shall submit 40 (Forty) copies of the printed prospectus to the Bangladesh Securities and Exchange Commission for official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper.
5. The Issuer company and the Issue Manager(s) shall ensure transmission of the prospectus, abridged version of the prospectus and relevant application forms for NRBs through email, simultaneously with publication of the abridged version of the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending of the printed copies of abridged version of the prospectus and application forms to the said Embassies and Missions within 5 (Five) working days of the publication date by Express Mail Service (EMS) of the postal department. A compliance report shall be submitted in this respect to the SEC jointly by the Issuer and the Issue Manager(s) within 2 (Two) working days from the date of said dispatch of the prospectus and the forms.
6. The paper clipping of the published abridged version of the prospectus, as mentioned at condition no. 2 above, shall be submitted to the Commission within 24 hours of the publication thereof.
7. The Company shall maintain separate bank account(s) for collecting proceeds of the Initial Public Offering and shall also open Foreign Currency (FC) account(s) to deposit the application money
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of the Non Resident Bangladeshis (NRBs) for IPO purpose, and shall incorporate full particulars of said FC account(s) in the prospectus. The Company shall open the above-mentioned accounts for IPO purpose; and close these accounts after refund of over-subscription money. Non-Resident Bangladeshi (NRB) means Bangladeshi citizens staying abroad including all those who have dual citizenship (provided they have a valid Bangladeshi passport) or those, whose foreign passport bear a stamp from the concerned Bangladesh Embassy to the effect that no visa is required for traveling to Bangladesh.
8. The Issuer company shall apply to all the stock exchanges in Bangladesh for listing within 7 (Seven) working days from the date of issuance of this letter and shall simultaneously submit the vetted prospectus with all exhibits, as submitted to BSEC, to the Stock Exchanges.
9. The following declaration shall be made by the Company in the prospectus, namely: -
“Declaration about Listing of Shares with the Stock Exchange(s):
None of the Stock Exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the Company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the Stock Exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be.
In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the Company, in addition to the Issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (Two Percent) per month above the bank rate, to the subscribers concerned.
The Issue Manager(s), in addition to the Issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 7 (Seven) days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money.”
10. The subscription list shall be opened and the sale of securities commenced after 25 (Twenty Five) days of the publication of the abridged version of the prospectus and shall remain open for 05 (Five) consecutive banking days.
11. A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”. The NRB applicants shall send applications to the Issuer company within the closing date of the subscription so as to reach the same to the Company by the closing date plus 9 (Nine) days. Applications received by the Company after the above time period will not be considered for allotment purpose.
12. The Company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank Ltd, which shall be mentioned in the Prospectus, as prevailed on the date of opening of the subscription for the purpose of application of the NRBs and other non-Bangladeshi persons, where applicable.
13. The Company and the Issue Manager(s) shall ensure prompt collection/clearance of the foreign remittances of NRBs and other non-Bangladeshi(s), if applicable, for allotment of shares.
14. Upon completion of the period of subscription for securities, the issuer and the Issue Manager(s) shall jointly provide the Commission and the stock exchanges with the preliminary status of the subscription within 5 (Five) working days, in respect of the following matters, namely: -
a. Total number of securities for which subscription has been received; b. Amount received from the subscription; and c. Amount of commission paid to the bankers to the issue.
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15. The Issuer and the Issue Manager(s) shall jointly provide the Commission and the Stock Exchanges with the list of valid and invalid applicants (i.e. final status of subscription) in electronic form in 2 (Two) CDs and final status of subscription to the Commission within 3 (Three) weeks after the closure of the subscription along with bank statement (original), branch-wise subscription statement. The list of valid and invalid applicants shall be finalized after examination with the CDBL in respect of BO accounts and particulars thereof.
16. The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 05 (Five) weeks from the date of the subscription closure), if any of the following events occur:
(a) Upon closing of the subscription list it is found that the total number of valid applications (in case of under subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the Stock Exchange(s) concerned; or
(b) At least 50% of the IPO is not subscribed.
¶wZMÖ¯Í ¶z`ª wewb‡qvMKvix, 17. 20% of total public offering shall be reserved for in the manner/procedure as directed by the Commission, 10% of total public offering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds and collective investment schemes registered with the Commission, and the remaining 60% shall be open for subscription by the general public. In case of under-subscription under any of the 20% and 10% categories mentioned above, the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the Issuer and the Manager(s) to the Issue shall jointly conduct an open lottery of all the applicants added together.
18. All the applicants shall first be treated as applied for one minimum market lot of 200 shares worth Taka 7,000/- (Taka Seven Thousand only). If, on this basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. In case of over-subscription under any of the categories mentioned hereinabove, the Issuer and the Issue Manager(s) shall jointly conduct an open lottery of all the applications received under each category separately in presence of representatives from the issuer, the Stock Exchanges and the applicants, if there be any.
19. An applicant cannot submit more than two applications, one in his/her own name and the other jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant.
20. The applicant shall provide with the same bank account number in the application form as it is in the BO account of the applicant.
21. The applicants who have applied for more than two applications using same bank account, their applications will not be considered for lottery and the Commission will forfeit 15% of their subscription money too.
22. Lottery (if applicable) shall be held within 4 (Four) weeks from closure of the subscription date.
23. The Company shall issue share allotment letters to all successful applicants within 5 (Five) weeks from the date of the subscription closing. Within the same time, refund to the unsuccessful applicants shall be made in the currency in which the value of securities was paid for by the applicants without any interest, through direct deposit to the applicant‟s bank account as far as possible/Account Payee Cheque/Refund warrants with bank account number, bank‟s name and branch as indicated in the securities application forms payable at Dhaka/ Chittagong/ Khulna/ Rajshahi/ Barisal/ Sylhet/ Bogra, as the case may be subject to condition no. 19,20 and 21 above.
Refund money of the unsuccessful applicants shall be credited directly to their respective bank accounts, who have chosen the option in the IPO application forms, as maintained with the bankers to the issue or any other banks mentioned in the application.
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A compliance report in this regard shall be submitted to the Commission within 7 (Seven) weeks from the date of closure of subscription.
24. The Company shall furnish the List of Allotees to the Commission and the Stock Exchange(s) simultaneously in which the shares will be listed, within 24 (Twenty Four) hours of allotment.
25. In the event of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriter(s) (subject to Para -16 above). The Issuer must notify the underwriters to take up the underwritten shares within 10 (Ten) days of the closing of subscription on full payment of the share money within 15 (Fifteen) days of the issuer‟s notice. The underwriter shall not share any underwriting fee with the Issue Manager(s), other underwriters, issuer or the sponsor group.
26. All issued shares of the issuer at the time of according this consent shall be subject to a lock-in period of 3 (Three) years from the date of issuance of prospectus or commercial operation, whichever comes later.
Provided that the persons (other than Directors and those who hold 5% or more shares in the company), who have subscribed to the shares of the Company within immediately preceding two years of according consent shall be subject to a lock-in period of 1 (One) year from the date of issuance of prospectus or commercial operation, whichever comes later.
27. In respect of shares of Sponsors/Directors/Promoters (if in paper format) shall be handed over to security custodian bank registered with BSEC and shall remain till completion of lock in and the name and branch of the bank shall be furnished to the Commission jointly by the Issuer and Issue Manager(s), along with a confirmation thereof from the custodian bank, within one week of listing of the shares with the Stock Exchange(s). Or they (shares of Sponsors/ Directors/ Promoters) can be demated and will remain in lock-in under CDBL system and issuer will submit a dematerialization confirmation report generated by CDBL and attested by Managing Director of the Company along with lock-in confirmation with BSEC within one week of listing of the shares with the stock exchange(s). In respect of shares other than Sponsors/Directors/Promoters the Issuer will ensure their lock-in of those shares and submit a statement to this effect to BSEC.
28. The Company shall apply to the Stock Exchanges for listing within 07 (Seven) working days of issuance of this letter and shall simultaneously submit to the Commission attested copies of the application filed with the Stock Exchanges.
29. The Company shall not declare any benefit other than cash dividend based on the financial statements for the year ended on December 31, 2013 before listing of its securities with Stock Exchange(s).
PART-B
1. In addition to the existing IPO application process, applicants can also apply through their Stockbroker/Merchant Bankers in the following process:
Step-1 (Applicant) a. Applicants other than Non‐resident Bangladeshi (NRB) and Foreign applicants for public issue of securities shall submit application/instruction, within the subscription period, to the Stockbroker/ Merchant Banker where the applicant maintains BO account. b. The application/instruction may be submitted in prescribed paper or electronic form, which shall contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time the applicant shall make the application money available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. Application/instruction s shall be preserved by the same Stockbroker/Merchant Banker up to 6 months from listing of the securities with exchange.
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Step-2 (Intermediary) a. The Stockbroker/Merchant Banker shall maintain separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/Merchant Banker shall verify the availability of fund and if find in order, block the customer account for an amount equivalent to the application money, accumulate all the application/instructions received up to the subscription closing date, deposit the amount in the “Public Issue Application Account” maintained with its bank, instruct the banker to block the account for an amount equivalent to the aggregate application money and to issue a certificate in this regard. In case of application submitted by the Stock‐dealer or the Merchant Banker‟s own portfolio, the application amount should also be transferred to the “Public Issue Application Account”. b. Banker of the Stockbroker/Merchant Banker shall block the account(s) as requested for, issue a certificate confirming the same and provide it to the respective Stockbroker/Merchant Banker. The Stockbroker/Merchant Banker shall prepare category wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the subscription closing date, send it to the issuer both in electronic (text format with tilde „~‟ separator) and printed format along with the certificate issued by its banker.
Step-3 (Issuer) a. The issuer shall prepare consolidated list of the applications and send the applicants‟ BOIDs in electronic (text format with tilde „~‟ separator) format in a CDROM to CDBL for verification. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not. Along with the verification report, CDBL shall provide the issuer with an updated database of the applicants containing BO Account Number, Name, Addresses, Parents‟ Name, Joint Account Information and Bank Account Information. After receiving verification report and information from CDBL, the issuer shall scrutinize the applications, prepare category wise consolidated lists of the valid and invalid applications, submit status reports of subscription to the Commission and the stock exchanges and conduct lottery in line with the conditions of the consent letter. b. Within 02 (two) working days of conducting lottery, the issuer shall:
i. send the lists of the successful and unsuccessful applicants (other than NRB and foreign) in electronic (text format with tilde „~‟ separator) and printed format to the Stockbroker/Merchant Banker, request them to unblock the amount blocked earlier and remit the amount of successful applicants to the issuers respective Escrow Account opened for subscription purpose. ii. issue allotment letters in the names of successful applicants in electronic format with digital signatures and send those to respective Stockbroker/Merchant Bankers. To credit the allotted shares to the respective BO accounts, the issuer shall send consolidated allotment data (BOID and number of securities) in text format in a CDROM to CDBL.
Step-4 (Intermediary) a. On the next working day of receiving the documents from the issuer and issue manager, the stockbroker/Merchant Banker shall request its banker to release the amount blocked earlier and remit the aggregate amount of successful applicants deducting service charge to the „Escrow‟ account of the issuer opened for the subscription purpose. b. On the next working day of receiving request from the Stockbrokers/Merchant Bankers, their bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the issuer‟s „Escrow‟ account. Simultaneously, the stockbrokers/Merchant Bankers shall unblock the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions.
Miscellaneous: a. The issuer and Issue Manager(s) shall jointly ensure compliance of the above.
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b. The Stockbroker/Merchant Banker shall be entitled to service charge at a rate of 0.05% on the total amount of application money received by them. The service charge shall be paid by the issuer and deducted by the Stockbroker/Merchant Banker from the amount of successful applicants while remitting to the issuer. In case of shortage of the service charge, the Stockbroker/Merchant Banker shall send a bill to the issuer and the issuer shall pay it within 02 (two) working days. The Stockbroker/Merchant Banker shall provide the issuer with a statement of the remittance amount and the processing fee.
2. The above application process is a pilot project and optional for investors, i.e. investors can apply either following new process through stockbroker/merchant banker or in existing process through banker to the issue.
3. List of the Stockbroker/Merchant Bankers participating in the pilot project is given below. Only the applicants maintaining accounts with the Stockbroker/Merchant Bankers name contained in the list can apply through the new process.
PART-C
1. The Issuer and the Issue Manager(s) shall ensure that the abridged version of the prospectus and the full prospectus is published correctly and in strict conformity with the conditions of this letter without any error/omission, as vetted by the Bangladesh Securities and Exchange Commission.
2. The Issue Manager(s) shall carefully examine and compare the published abridged version of the prospectus on the date of publication with the copy vetted by BSEC. If any discrepancy/ inconsistency is found, both the Issuer and the Issue Manager(s) shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies thereof to BSEC and the Stock Exchange(s) concerned, correcting the discrepancy/inconsistency as required under „Due Diligence Certificates‟ provided with BSEC.
3. Both the Issuer company and the Issue Manager(s) shall, immediately after publication of the prospectus and its abridged version, jointly inform the Commission in writing that the published prospectus and its abridged version are verbatim copies of the same as vetted by the Commission.
4. The fund collected through Public Offering shall not be utilized prior to listing with Stock Exchanges and that utilization of the said fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc.
5. The Company shall furnish status report on utilization of Public Offering proceeds audited by foreign affiliated auditors and authenticated by the board of directors to the Commission and to the stock exchanges within 15 (Fifteen) days of the closing of each month until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any irregularity or inconsistency, the Commission may employ or engage any person, at Issuer‟s cost, to examine whether the Issuer has utilized the proceeds for the purpose disclosed in the prospectus.
6. While auditing the utilization of IPO proceeds, the auditors‟ shall perform their jobs under the following terms of references (TOR) and confirm the same in their report/certificate:
(a) Whether IPO proceeds have been utilized for the purposes/heads as specified in the prospectus;
(b) Whether IPO proceeds have been utilized in line with the condition numbers 4&5, part C of the Commission‟s consent/approval letter for the IPO issue;
(c) Whether utilization of IPO proceeds have been completed within the time schedule/implementation schedule as specified in the prospectus;
(d) Whether utilization of IPO proceeds is accurate and for the purpose of the company as mentioned/specified in the prospectus; and
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(e) The auditors should also confirm that: (i) assets have been procured/imported/constructed maintaining proper/required procedure as well as at a reasonable price; and (ii) auditor‟s report has been made on verification of all necessary documents/papers/vouchers in support of utilization of IPO proceeds making reconciliation with Bank Statement.
7. All transactions, excluding petty cash expenses, shall be effected through the Company‟s bank account(s).
8. Proceeds of the Public Offering shall not be used for any purpose other than those specified in the prospectus. Any deviation in this respect must have prior approval of the shareholders in the shareholders meeting under intimation to BSEC and Stock Exchanges.
9. Directors on the Company‟s Board will be in accordance with applicable laws, rules and regulations.
10. The financial statements should be prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) as required by the Securities and Exchange Rules, 1987.
11. A compliance report on Corporate Governance Guideline as per the provision of the Bangladesh Securities and Exchange Commission notification no. SEC/CMRRCD/2006- 158/129/ADMIN/44 Dated 7 August 2012 shall be submitted to the Commission before 07 (seven) working days of the IPO subscription opening.
12. If any quarter or half-year of the financial year ends after publication of the abridged version of prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the said quarterly/half yearly financial statements in accordance with the Commission‟s Notification SEC/CMRRCD/2008-183/admin/03-34 dated September 27, 2009 and the section 13 of the Securities and Exchange Rules, 1987.
13. In the event of arising issues concerning Price Sensitive Information as defined under the wewagvjv 1995 wmwKDwiwUR I G·‡PÄ Kwgkb (myweav‡fvMx e¨emv wbwl×KiY) after publication of the abridged version of prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the information as price sensitive in accordance with the Commission‟s Notification No. SEC/SRMI/200-953/1950 dated October 24, 2000.
14. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information in the application shall make the application liable to rejection and subject to forfeiture of 25% of application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited application money or share (unit) will be deposited in account of the Bangladesh Securities and Exchange Commission (BSEC). This is in addition to any other penalties as may be provided for by the law.
15. No issuer of a listed security shall utilize more than 1/3rd (one-third) of the fund raised through IPO for the purpose of loan repayment.
PART-D
1. All the above conditions imposed under section 2CC of the Securities and Exchange Ordinance, 1969 shall be incorporated in the prospectus immediately after the page of the table of contents, with a reference in the table of contents, prior to its publication.
2. The Commission may impose further conditions/restrictions etc. from time to time as and when considered necessary which shall also be binding upon the Issuer Company.
PART-E
1. As per provision of the Depository Act, 1999 & regulations made there under, shares will only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (Including Rights/Bonus) will be made in dematerialized form only.
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An applicant (including NRB) shall not be able to apply for allotment of shares without Beneficial Owners (BO) account.
2. The Company and the Issue Manager(s) shall ensure due compliance of all the above conditions and the Securities and Exchange Commission (Public Issue) Rules, 2006.
General Information
i. Alliance Financial Services Limited (AFSL) have prepared the prospectus based on information provided by Bangladesh Steel Re-Rolling Mills Limited (BSRM) (the Issuer Company) and also upon several discussions with the Chairman, Managing Director, Directors and concerned executives of the issuer company. The Directors of Bangladesh Steel Re-Rolling Mills Limited and Alliance Financial Services Limited collectively and individually, having made all reasonable inquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material aspects and that there are no other material facts, the omission of which would make any statement herein misleading.
ii. No person is authorized to give any information or to make any representation not contained in this Prospectus and if given or made, any such information and representation must not be relied upon as having been authorized by the issuer company or issue manager.
iii. The Issue as contemplated in this prospectus is made in Bangladesh and is subject to the exclusive jurisdiction of the Courts of Bangladesh. Forwarding this prospectus to any person residing outside Bangladesh in no way implies that the issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country. iv. A copy of this prospectus may be obtained from the Registered & Corporate Head Office of Bangladesh Steel Re-Rolling Mills Limited, Alliance Financial Services Limited, the Underwriters and the Stock Exchanges where the securities will be listed.
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SECTION II
DECLARATIONS AND DUE DILIGENCE CERTIFICATES
Declaration about the Responsibility of the Directors, including the CEO of the Company “Bangladesh Steel Re-Rolling Mills Limited” in respect of the Prospectus
This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative action against any or all of us as it may deem fit.
We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well-informed decision for investment.
Sd/ Mr. Alihussain Akberali, FCA Chairman & Managing Director
Sd/- Sd/- Mr. Zohair Taherali Mr. Aameir Alihussain Director Director
Sd/- Sd/- Ms. Tehseen Zohair Taherali Ms. Sabeen Aameir Director Director
Consent of the Director(s) to Serve as Director(s)
We hereby agree that we have been serving as Director(s) of “Bangladesh Steel Re-Rolling Mills Limited" and shall continue to act as a Directors of the Company.
Sd/ Mr. Alihussain Akberali, FCA Chairman & Managing Director Sd/- Sd/- Mr. Zohair Taherali Mr. Aameir Alihussain Director Director Sd/- Sd/- Ms. Tehseen Zohair Taherali Ms. Sabeen Aameir Director Director
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Declaration about filing of Prospectus with the Registrar of Joint Stock Companies & Firms
A dated and signed copy of the Prospectus has been filed for registration with the Registrar of Joint Stock Companies & Firms, Government of the People‟s Republic of Bangladesh, as required under Section 138(1) of the Companies Act, 1994.
Due Diligence Certificate of Manager to the Issue
Subject: Public offer of 17,500,000 Ordinary Shares of Tk. 10/- each at an offer price of Tk. 35/- each, including premium of Tk. 25/- per share totaling to Tk.612,500,000/- of Bangladesh Steel Re-Rolling Mills Limited.
We, the under-noted Manager to the Issue to the above-mentioned forthcoming issue, state as follows:
1. We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other materials as relevant for adequate disclosures to the investors; and
2. On the basis of such examination and the discussions with the issuer company, it‟s directors and officers, and other agencies; independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.
WE CONFIRM THAT:
(a) The draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers relevant to the issue;
(b) All the legal requirements connected with the said issue have been duly complied with; and
(c) The disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue.
For Manager to the Issue
Sd/- Tapan K Podder FCA, FCMA Managing Director Alliance Financial Services Limited
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Due Diligence Certificate of the Underwriter(s)
Subject: Public offer of 17,500,000 Ordinary Shares of Tk. 10/- each at an offer price of Tk. 35/- each, including premium of Tk. 25/- per share totaling to Tk.612,500,000/- of Bangladesh Steel Re-Rolling Mills Limited.
We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows:
1. We, while underwriting the above mentioned issue on a firm commitment basis, have examined the draft prospectus, other documents and materials as relevant to our underwriting decision and
2. On the basis of such examination and the discussions with the issuer company, it‟s directors and officers, and other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.
WE CONFIRM THAT:
(a) All information as are relevant to our underwriting decision have been received by us and the draft prospectus forwarded to the Commission has been approved by us.
(b) We shall subscribe and take up the un-subscribed securities against the above-mentioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and
(c) This underwriting commitment is unequivocal and irrevocable.
For Underwriter(s)
Sd/- Sd/- Managing Director Managing Director (Acting) GSP Finance Company (Bangladesh) Limited Trust Bank Investment Limited
Sd/- Managing Director & CEO BD Finance Capital Holdings Limited
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SECTION III
RISK FACTORS & MANAGEMENT’S PERCEPTION ABOUT THE RISKS
An industry faces external and internal risk factors having direct as well as indirect effects on the investments. Before making any investment decision, investors should consider all the risk factors. The assessable risk factors, both external and internal, and management‟s perception thereabout are enumerated below:
Risk of High Dependency on Debt & Interest Rate
Steel industry being a capital intensive is heavily dependent on debt fund. Fluctuation of interest rates (Cost of borrowed funds) affects the profitability as well as liquidity position of a company. The Company is now enjoying 5,529.91 million of outstanding loans as on 31 Deceber 2013. Furthermore proceeds of Bond was issued for investment in BSRM Steel Mills Limited as well as for repayment of bank loan obtained due to ongoing BMRE. Enhanced interest rate burdens alongwith additional financial charges for both the bond as well as the bank loan may reduce the profitability of the company.
Management Perception
The Company negotiates interest and other finance charges on different types of loans taken from Banks/Financial Institutions at regular intervals. The Company avails a very competitive rate as it has good credit rating and well-established credibility in the financial market as to debt service. Moreover proposed bond was also structured with very attractive rate at present condition. Confidence level of the loan providers on the management of the Company is very high as it pursues growth and prosperity in terms of sales, assets, and other positive qualitative and quantitative factors on a gradual basis. However with the proposed BMRE of the company and investment in BSRMSML, earnings of the company are expected to enhance significantly.
Exchange Rate Risk
The company always faces high degree of foreign exchange rate fluctuation risk as the company imports machineries, raw materials and other spares against payment of foreign currency. Unfavorable volatility in exchange rates may affect the profitability of the company.
Management Perception
The Management of the company is very much aware of the risk and it has policy for continuous monitoring of the fluctuations on day to day basis so as to seize the opportunity from any favorable movement in the currencies (normally US Dollars and BDT) whilst avoiding any unexpected movements in those currencies. However to reduce the affect directly due to the rate fluctuation the Group has already taken steps to increase their billet (raw material ) production capacity by establishment of a separate industry, which will help them to significantly reduce their dependency on foreign currency as well as imports.
Industry Risks
Recently, many companies started production of high grade MS Rod & other MS products and selling thereof. Among them 2/3 companies are emerging as giant in respect of investment in this sector and others are in the process to increase their production capacity. Expected high competition in the markets where the Company sells its products may erode its market share and may result in reduced prices and thereby may negatively affect BSRM‟s revenues and profitability. Page | 17
Management Perception
BSRM is clearly aware of this risk and pays careful attention to manage this risk. It has been working consistently in steel sector since 1952 and gained very high skills. It has the ability to face strong competition by ensuring their marketing in the right track and strong supply chain relationships for competitive input costs. Moreover, to strengthen the competitive advantage, the company has undertaken the expansion of its capacity from 120,000 MT to 450,000 MT that is expected to be completed by first quarter of 2015. Furthermore, to avoid dependency on imported raw materials, BSRM Group is in the process of establishing the largest billet making plant in Bangladesh under the name of BSRM Steels Mills Limited (BSRMSML), which is expected to start production from the beginning of January 2015.
Market Risks
Market risk arises due to mainly decrease in demand of the products which would harm the performance of the company. BSRM like other company may face strong competition which might take place even after taking the best quality control measures.
Management Perception
BSRML is the strongest brand and market leader in the local industry. Present market share of the company in quality steel production is around 26%. There is a good possibility that BSRM group can retain its dominating position in the market. Due to its strong branding and rapidly increasing demand in the country, where industrial development, living standard and rate of infrastructural development increased over the period, there would always be a high demand for quality steel products. BSRM has always been aware of the competitive situation in the market and accordingly has developed a sound and effective marketing policy to share knowledge about their products with design engineers, thus creating more awareness in the minds of the customers. Moreover, with expand capacity of the company along with the increased production of billet by the new plant, they will be able to enhance their market share and grip the control of this sector for long time to come.
Market and Technology-Related Risks
Technologies used by a company may provide competitive advantage over the competitors. Failure to compete with the other market players in terms of technology would result in adverse effect on the company‟s productivity as well as profitability. BSRM being a capital-intensive entity it would require technological edge over its competitors in order to build and maintain its position in the marketplace(s) in the years to come.
Management Perception
Highly automated and competitive machineries are available with the company for the manufacture of various steel products. The Company has so far been one of the pioneers in Bangladesh in setting up Steels Mills with State of the Art European Technology for further processing of the input materials. The group has also taken initiative to implement ERP to integrate operation of basic functions, namely Finance & Accounts, Sales & Marketing, Supply Chain, Inventory, Maintenance and Manufacturing. It already has selected Oracle e-Business Suite to automate operations of mentioned functions given economic match to functional requirements. BSRM Management Implementatied Oracle ERP in all business areas to have real time data w.e.f March 2014.
Potential or Existing Government Regulations
The Company operates under Companies Act, Income Tax Ordinance, Income Tax Rules, Value Added Tax (VAT) Act, Value Added Tax (VAT) Rules. Any abrupt changes of the policies made by the regulatory authorities may adversely affect the business of the Company.
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Management Perception
Unless there is any change in policy that may bring about any adverse effect in the industry concerned, the business of the company will not affect significantly. As a developing country, economy as well as living standard of Bangladesh is improving over the period that helps to raise demand of steel and re-rolled products. In addition, Government‟s infrastructure building activities is an important source of demand. Therefore, it is highly unlikely that the government will initiate any fiscal measure having adverse effect on the growth of the industry.
Potential Change in Global or National Policies
Changes in the existing global or national policies can have either positive or negative impacts on the Company. Any scarcity or price hike of raw materials due to changes in policy in the international market might hamper the production and profitability. Furthermore, the performance of the Company may also be hampered due to unavoidable circumstances like political turmoil both in Bangladesh and worldwide.
Management’s Perception
Any change in the global and national policy will affect the industry as a whole. Financial and operational strength of the Company have reached to a very high level by now and the company is capable of handling reasonable threats. Moreover, the Company has adequate system and procedures in place to take care of any of such events.
Non-operating History
Any interruption in the operations of the company affects the company‟s image as a going concern. Failure to ensure uninterrupted operation reduces profitability and in long run weakens the fundamentals of the company.
Management Perception
There is no history of BSRM remaining non-operative at any point of time during its more than 50 years of operation except a few months during our Liberation War.
Operational Risk i) Risk Associated with Supply of Raw Materials
The main raw material is billet for manufacturing MS products while Scrap is the basic raw materials for billets. There is shortage of billets and scrap in the local market and large quantity of raw materials is being imported every year to meet the industrial demand. High cost of imported billets and unavailability due to protection by exporting countries may cause increase in billet price. Volatility in the prices of raw materials, including limitations on or disruptions in the supply of raw materials, could adversely affect the Company„s profitability.
Management Perception
Presently BSRML‟s billet requirement is largely comes from its own backward linked billet-making unit. With the ongoing expansion of capacity, the company‟s billet requirement will go up by almost 4 times. BSRM is always focused on seeking proprietary access to raw materials in order to optimize its costs and to achieve a higher level of self-sufficiency in raw materials, which would enable it to better respond to cyclical fluctuations in demand and reduce volatility in production costs. Therefore, the group had taken initiative for setting up a new billet plant for reducing production costs and import dependency in addition to the reliable backward integration within the Group concerns. Besides, the substantially large difference between the scrap prices and billet price creates a situation where locally manufactured billet is much cheaper than the landed cost of imported billet. With the establishment of the new billet making plant, BSRM Group will be able to attain efficiency in terms of time and cost, assured quality of raw materials, strengthened backward integration and less dependency on import. Therefore, risk attached to import of raw materials will be minimum.
Page | 19 ii) Non-Availability of Electricity and Gas Supply may Disrupt the Operations
Energy is a significant input and considered as lifeline for the steel industry. Bangladesh is facing severe power crisis. Presently BSRM Group is one of the leading power consumers of the country, which will increase significantly after implementation of the ongoing expansion of BSRM and new billet plant. In the past the group did not face any severe crisis of power but government may fail to supply necessary power and gas which will disrupt the production.
Management Perception
Bangladesh Power Development Board (BPDB) provides power supply for BSRM group. Currently total connected load for BSRM group is 60 MW from which four group concerns including BSRM is receiving power. Under an agreement among BSRM BPDB and PGCB, a 132/33 KV substation was installed by BSRM at Kulshi Sub Station, Chittagong for power supply to its four sister concerns through 33 KV transmission line. This substation is providing power by one dedicated uninterrupted power through an 11 KV transmission line from its Melting unit. After BMRE a 33 KV transmission line for the new machineries will be taken and will be step down as 33/11 KVA transformer by BSRM. Therefore, demand of power for the ongoing expansion/BMRE will be met.
In addition to the above, BSRM Group has plan to establish a coal-based merchant power plant to generate 150MW power and a company namely Chittagong Power Company Limited (CPCL) has been incorporated. EOI has been submitted to BPDB and approval for setting up such a power project has also been obtained. The entire generated power will be initially transmitted to National Grid and in return all the projects of BSRM Group will get uninterrupted power.
Existing connected load of gas for the mill is adequate for present operation. For the proposed expansion the company has already applied for 1,898,832 m3/month load of gas. Notable strength for the new project is the dual fired furnace. HSFO (High Sulfur Furnace Oil)/ Light Diesel Oil can be used for new machineries in case of gas crisis. iii) Management Risk
The risks associated with ineffective or underperforming management due to fast expansion of the company may affect the profitability.
Management Perception
BSRM Group has experience of steel business for last 60 years and established sound management structure. It has highly experienced work force to establish and run steel manufacturing business. Moreover, it has recently appointed world famous consulting firm “Price Waterhouse Coopers” to evaluate and reorganize its managerial & organizational setup. Thus as the senior managers are professionals having relevant job and academic background and associated by the reorganization made by “Price Water house Coopers”, management risk and operational risk is greatly minimized. iv) Environmental risk
A steel mill usually creates environment pollution through emission of smokes in the air and disposal of water. Furthermore, usages of low-quality machineries and raw materials by the plant may pollute the environment that is unhealthy for the society as well as country.
Management Perception
The Group is one of the pioneers in setting up Steels Mills with environment friendly State of the Art European Technology. Furthermore, the Company takes measures to ensure a pollution-free environment, which is compatible to the environmental regulations of Bangladesh in terms of both noise and atmospheric emission. The melting technology adopted by BSRM is also free from sound pollution. There are no emissions from rolling mills that can disrupt the environment. Water used for the rolling technology is recycled and hence does not pollute the environment.
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Fluctuating Profitability Risk
Profitability of the steel industry is highly unstable and fluctuates drastically which may ultimaly leave the company uncertainity in the results as well as dividend of the company.
Management Perception
Due to high fluctuation of billet/scrap prices in the international market and cost of raw material being the majot part of the cost of production, the profitability of the company also varies. However the company has a management team having long experience in handling such volatility and it is expected that the company will be able to minimize it as they have established their capability in the past. In order to minimize the impact of volatility in international prices, the company has taken the BMRE program to enjoy the economy of scale and operation of the Group‟s billet plant within first quarter of 2015 which will also contribute a lot to the stability of prices.
Risk of implementation of BMRE
A portion of the IPO proceeds will be utilized for implementation of BMRE to enhance its capacity from 120,000 MT to 450,000 MT per annumn. Implementation of a new project carries some inherent risks and may not be successful or may take long time to secure desired profitability.
Management Perception
The management of BSRM has long experience in the sector and implemented several similar projects/BMRE successfully. Hence it is expected that the proposed BMRE will be implemented smoothly within the time schedule.
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SECTION IV
CAPITAL STRUCTURE & PURPOSE OF PUBLIC OFFERING
CAPITAL STRUCTURE OF THE COMPANY
Particulars Amount No of shares (BDT) Authorized Capital 500,000,000 5,000,000,000
Paid Up Capital Before IPO
Amount Particulars of Allotment Date of Allotment No of shares (BDT) Memorandum of Association 28-Dec-1960 5,000 50,000 Other than Cash 30-May-1961 45,000 450,000 Cash 04-Dec-1962 29,150 291,500 Other than Cash 04-Dec-1962 70,850 708,500 Bonus 15-Dec-1965 50,000 500,000 Cash 20-Dec-1998 80,000 800,000 Cash 01-Feb-1999 10,000 100,000 Cash 03-Apr-2001 1,000,000 10,000,000 Cash 12-Mar-2002 10,000 100,000 Cash 27-Sep-2003 200,000 2,000,000 Cash 27-Jun-2005 8,085,000 80,850,000 Bonus 31-Dec-2006 958,500 9,585,000 Bonus 22-Sep-2007 1,581,520 15,815,200 Bonus 31-Jan-2010 12,125,020 121,250,200 Cash 20-Jun-2010 11,586,300 115,863,000 Cash 21-Sep-2010 23,133,700 231,337,000 Bonus 10-Jan-2011 5,375,451 53,754,510 Through merger 30-Sep-2012 27,160,056 271,600,560 Bonus 12 -Nov-2012 64,345,491 643,454,910 Paid Up Capital before IPO 155,851,038 1,558,510,380
Paid up Capital after IPO
Particulars Amount No of shares (BDT)
Paid up Capital Before IPO 155,851,038 1,558,510,380 IPO (Initial Public Offering) 17,500,000 175,000,000 Paid up Capital after IPO 173,351,038 1,733,510,380
Note: As approved by BSEC on January 09, 2014, 12% of the total bond (BDT 2,000 Million) i.e. BDT 212.4 million will be converted into ordinary shares within 30 days after one year from issuance of such bond except for SABINCO portion. Subscription for Tk. 1,500 million of bonds with different Bank and Financial Institutions has been completed and commitment for Tk. 500 million of bonds is taken from Eastern Bank Limited, which will be subscribed within short period of time. Conversion will take place at BDT 38 including premium of BDT 28 per share with face value of BDT 10 per share. Details of the bond are presented under “Debt Securities” in the prospectus.
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USE OF IPO PROCEEDS AND STAGES OF UTILIZATION
BSRM is in the process to enhance its capacity from 120,000 MT to 450,000 MT per annum through a BMRE to cater the growing demand of quality steel in the country. Estimated project cost for this ongoing expansion stands at Tk. 5,863.70 million. The fund will be arranged Tk. 3,385.78 million from Term Loan, Tk. 1,886.41 million from own sources and remaining Tk. 591.51 million will be from IPO proceeds. Term loan was arranged through two syndications of Banks and FI leaded by United Commercial Bank Limited and One Bank Limited. An amount of Tk. 1,281.72 million of term loans out of Tk. 3,385.78 million was already incurred as cost. Details of project cost are presented under ongoing expansion / BMRE section of this prospectus.
Before receiving IPO proceeds, BMRE of our mill will be almost complete against our internal resources/ bank loan. Accordingly we shall utilize IPO fund for part payment (Retention money) for machineries, construction of finished goods storage, IPO expenses and the balance amount for repayment of bank loan.
Summary of Utilization of IPO Proceeds
Amount in Million Utilization of fund Implementation schedule Euro Tk. On Going Expansion BMRE A. Payment of Retention Money 0.360 36.00 April 2015 (For Machinery) 1.842 184.20 September 2015 Total 2.202 220.20 B. Finished Goods Storage Shed 167.31 Within December 2015 after getting IPO fund C. Loan repayment 204.00 Immediate the IPO fund is available IPO Expenses (approx) 20.99 Time to time , As and when required Total IPO proceeds 612.50
A: Details of Retention Money: Amount in Million(Euro) Contract LC Documents Retention Description Advance Value Value retired money 1. Supplier name: Forni Industriali Bendotti S.p.A, Italy 3.60 0.36 2.88 2.88 0.36 Name of machinery: 100 T/H Pusher Furnace LC No- 1006-1302-0033 2. Supplier name: Danieli & C. Offocine Meccaniche S.p.A, Italy Name of machinery: Rolling mill machines with 18.42 1.842 14.736 14.160 1.842 standard accessories. LC No- 1006-1302-0020 Total 2.202
B. Details of Finished Goods Shed Description Unit Quantity Rate (Tk.) Total Amount (TK) Steel Structure Work (Pre-fabricated Building) MT 680 155,000 105,400,000 Piling work for shed nos 140 136,500 19,110,000 Concrete for pile cap & column foundation M³ 2,000 13,000 26,000,000 Reinforcement for pile cap &column foundation Ton 200 84,000 16,800,000 Total 167,310,000
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Terms of Contract
The company did not enter into any contract for aforesaid utilization of proceeds. However, LC for capital machineries with Forni Industriali Bendotti S.p.A, Italy and Danieli & C. Offocine Meccaniche S.p.A, Italy has already been opened.
Sd/- Sd/- Mr. Alihussain Akberali, FCA Mohammed Reazul Kabir, FCA Managing Director Chief Financial Officer
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SECTION V
DESCRIPTION OF BUSINESS
BACKGROUND OF THE PROJECT
Bangladesh Steel Re-Rolling Mills Limited is the first fully automatic re-rolling mills built in the country. It was established in 1952 as a small manually operated rolling mill by four businessmen, Mr. Akberali Alibhai Africawala, Mr. Taherali Africawala, Mr. Abdul Hussain Africawala and Mr. Rajabali Africawala. Later in 1960 it was reconstructed under the Companies Act 1913 as “East Bengal Steel Re-Rolling Mills Limited”. After our liberation the company was renamed as “Bangladesh Steel Re-Rolling Mills Limited”, and become the flagship company of BSRM Group.
In 1984, the old plant was dismantled and commissioned with fully automatic machinery from UK with enhanced annual production capacity of 60,000 MT. In 2004 another BMRE was made and the production capacity increased to 120,000 MT introducing high quality 60-grade re-enforcing steel to facilitate heavy construction in Bangladesh.
In 2011, Bangladesh Steel Re-Rolling Mills Limited amalgamated with “Meghna Engineering Works Limited (MEW)” another concern of BSRM Group engaged in billet making. Since the amalgamation, the two companies carries out its business as a single legal entity and operates as two separate units (Bangladesh Steel Re-Rolling Mills Limited as “Re-rolling mills” and Meghna Engineering Works Limited as “Steel Melting Works”) for administrative purpose only. In the Steel Melting Works unit, MS Billet is produced from scraps and sponge iron and then by rolling this MS billet the Re-rolling Mills unit produces 60 grade and 40 grade MS bars , angles, channels, I-beam, great-beam etc.
CURRENT OPERATION
The registered office of the Company situated at Ali Mansion, 1207/1099 Sadarghat Road, Chittagong. The Re-rolling Factory is located at 147/148/149, Baizid Bostami Road, Nasirabad I/A, Chittagong with installed capacity of approximately 120,000 MT per annum.
The Factory of Steel Melting Works (formerly known as MEW) is located at 78/79, Nasirabad I/A, Chittagong, producing M.S Billet.These two factories are just opposite to each other of the under construction road toward Dhaka-Chittagong Highway from Baizid Bostami Road.
ONGOING EXPANSION / BMRE
The BMRE program is going on in the mill to enhance its capacity from 120,000 MT to 450,000 MT per annum to cater the growing demand of quality steel in the country. After BMRE, BSRM will be the largest mill of its kind in the country having capacity of producing large variety of steel products under one facility using the latest technology. The machinery will be bought from renowned suppliers of Italy, Taiwan, China and India. After modernization, BSRM will be able to produce hot rolled bars, Thermo Mechanically Treated (TMT) bars, Angles, Channels, Flats, Shafts and Tees.
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Estimated project cost for this ongoing expansion stands at Tk. 5,863.70 million details of which are as under: (Amount in Million)
Sl Cost to be Project Cost Cost incurred Total Cost No incurred
1 Land and Land Development 294 .02 - 294.02 2 Building Construction 615.07 654.93 1,270.00 3 Civil Works 4 Plant & Machinery 2,136.00 1466.28 3,602.28 5 Office Equipment & Vehicles 1.00 1.00 2.00 6 Deposits & Prepayments 2.00 0.00 2.00 7 Preliminary & Pre-Start up Expenses 15.00 10.20 25.20 8 Consultancy Services 12.00 5.86 17.86 9 Contingency - 36.56 36.56 10 IDCP 93.04 520.74 613.78 Total Project Cost 3,168.13 2,695.57 5,863.70
Cost to be Mode of Financing Cost incurred BDT Million incurred Term Loan (including IDCP) 1,281.72 2,104.06 3,385.78 Own source 1,886.41 - 1,886.41 IPO - 591.51 591.51 Total 3,168.13 2,695.57 5,863.70
Term loan was arranged through two syndications of Banks and Financial Institutions. Major terms and condition of two syndications are as follows:
Lead Arranger United Commercial Bank Limited One Bank Limited
Participator Institutions 16 Bank/Financial Ins. 07 Bank/Financial Ins. Agreed Amount Tk. 2,785.78 million Tk. 600.00 million Repayment Schedule This loan has 18 months‟ grace This loan has one year grace (IDCP) (IDCP) period from the start of first period from the start of first drawdown. drawdown. After this period the total After this period the total amount including amount including the IDCP and the the IDCP and the current interest current interest amounts to be amounts to be repaid in 20 equal repaid in 60 equal monthly installments. quarterly installments. The company has received the first drawdown on 16th September 2012.
The rate of interest on loans are floating and shall be determined by the Majority Lenders in consultation with the Company to be fixed on semi-annual basis on prevailing market condition and within Bangladesh Bank guidelines. Rate of interest Interest rate may also be reviewed at any time within the six months period if
market situation for both the parties (i.e. the Company and the Lenders) demands the same. Decision taken by this way will be conclusive and binding on all the parties thereon subject to the provisions of the Sanction Letters.
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Expected date of Commercial Operation: Commercial Operation of the BMRE is expected on April 2015
IMPORTANT DATES
Incorporation as a Private Limited Company 28 December 1960 Commencement of Commercial Operation (as a private company) 1960 Introduced high-strength cold-twisted steel bars 1984 Enhanced annual production capacity of 60,000 MT 1984 Installed automatic billet based rolling mills 1987 Introduced largest billet-making plant in BD 1996 Date of Conversion into Public Limited Company 03 November 2009 Production capacity increased to 120,000 MT 2004 Amalgamation of Meghna Engineers Works Ltd with BSRM 2011 Approval from BSEC for Merger of MEW with BSRM 30 September, 2012
NATURE OF BUSINESS
Principal activities of the company are to carry on the business of production of MS Billet from scrap, MS Rod from Billets and other MS products there from and selling thereof. The company also imports MS product like H Beam, Angles and I Beam etc.
PRINCIPAL PRODUCTS AND SERVICES
Bangladesh Steel Re-Rolling Mills Limited produces a low carbon weldable quality high strength and high ductility concrete reinforcing bar that is now extensively used all over Bangladesh. It produces 60 grade and 40 grade MS bars, angles, channels, I-beam, great-beam, etc. After the BMRE, it will also be able to produce 500 grade rebar.
The Steel Melting Works (SMW) unit of the Company produces MS billets which are used for producing MS Rod by the company. A portion of these billets is also sold to the BSRM Steels Limited.
The company also deals in sale of imported MS Product like angles, channel, I Beam, H Beam, ingot etc.
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GROUP PROFILE
BSRM Group is the largest and leading industrial conglomerate in the steel sector of Bangladesh. This is the only 3rd generation steel Group working in the country. The Group has been building the nation since 1952. The founders of the Group are Late Akberali Alibhai, Late Taherali Africawala and two his brothers. More than 60 years ago four manual rolling mills, the first of its kind, were set up in the country to produce plain bars for construction purposes.
In 1987 a milestone was achieved. The four old manual mills were scrapped and an automatic billet based rolling mills was installed under the name of BSRM. Then in 1996 the company commissioned a captive billet making plant under the name of Meghna Engineering Works Limited.
In 2006 the first and the only ribbed wire cold rolling plant in the country using European Technology to make 500 mpa yield strength wire reinforcements in sizes 4.5mm, 5.7mm and 7.1mm was introduced by BSRM helping to bring down the cost of construction. In 2008, with the commissioning by DANIELI, Italy, BSRM Group has built a state-of-the-art rolling mill at Fouzderhat Industrial Estate, Chittagong named BSRM Steels Limited, a crowning glory not only for the company but also for the nation, which is now listed with two bourses.
Later in 2010 BSRM Group established another footstep by commissioning 151,000 MT billet making plant in Nasirabad Chittagong named BSRM Iron & Steel Co. Ltd. (BISCO) with the state-of-the-art technology. The Group now can produce approximately 700,000 MT rebar annually which will be enhanced to 1.00 million MT after implementation of the ongoing expansion of BSRM.
Most of the group concerns are ISO-9001:2000 certified. The products are also tested and certified by BUET, BDS, etc and the Group always maintains international standard in its production for the best quality products with guaranteed customer satisfaction.
BSRM Group has a clear vision to be the number one and leader of the sector on every count viz. market share, cost effectiveness, quality and innovation. Capital is continuously being injected in the plants to improve efficiency and the company conducts product and market research to match the needs of the time.
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A brief on Sister concerns of the group at a glance
Name of the Company Current Status
BSRM Steels Limited has been listed with both Dhaka & Chittagong Stock Exchanges in 2009. The plant is fully automated 600,000 TPA BSRM Steels Ltd. re-rolling mill supplied by Danieli of Italy and located at Fouzderhat Industrial Area, Chittagong. It produces latest generation “Xtreme 500W” grade 500 re-bars. BISCO, the subsidiary of BSRM Steels Limited, produces high-grade BSRM Iron & Steel Co. Ltd. MS Billet for BSRM Steels Ltd. The project is in operation since June (BISCO) 2010 and now operating at around 90% capacity. Owners of land property and commercial buildings at Dhaka and H. Akberali & Co. Ltd. Chittagong (Agrabad & Sadarghat). Running a wire drawing plant at Karnafully Engineering Works Ltd. BSRM Wires Ltd. premises in Nasirabad, Chittagong. Owners of a 3.26 acre scrap processing yard and covered buildings for Karnafully Engineering Works storage in Nasirabad Industrial Area, Chittagong and wire Ltd. manufacturing unit of BSRM Wires Limited. Owners of a scrap processing unit in Nasirabad, Chittagong, with BSRM Recycling Industries Ltd. imported shears and cranes. Being used as storage for slags and machineries situated at Nasirabad Bangladesh Steels Ltd along with 2.65 acre plot at Faujderhat Industrial Area to stock billets of BSRMS This is a proposed project for the production of 862,000 MT MS Billet per year. Land acquisition for the project has already completed and BSRM Steel Mills Limited other installations are continuing in full swing. The project is expected to go into commercial operation from January 2015. This is a proposed coal-fired power plant for generation of 150 MW Chittagong Power Company Ltd. power primarily to meet the consumption of BSRM Group concerns. It (CPCL) has already received permission from the Govt. and expected to start power generation within next 3 years. The proposed jetty will be built in Bhatiary. Permission from the Govt. has already been received. Furthermore, the company owns and BSRM Logistics Limited operate a fleet of 55 trucks lorries to carry own materials to customer site.
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STRENGTH OF BSRM
Experienced Management Team The Company„s senior management team comprises members with extensive experience and professional qualifications in the steel industry. Their rich experience and understanding of the Company have been instrumental in building a sustainable business and supporting the Company„s operations. Moreover BSRM group has experience in this field for more than 60 years and hence customers trust them for being so long in this business. It employs senior experienced management staffs in its organization.
Market Leader BSRM is the market leader in the steel Market of Bangladesh. They occupy 26% of the total steels market of the country.
Great competitive Skills It has been working consistently in steel production sector. Therefore, it has achieved great competitive skills. It has the ability to face strong competition.
Reliability Be the preferred business partner of the customer and suppliers by offering quality products; providing best and timely service before and after the business transaction.
Strong Employee Bonding and Belongingness BSRM employees are one of the major assets of the company. The employees of BSRM have a strong sense of commitment towards organization and feel proud as well as sense of belonging towards BSRM. The strong culture of BSRM is the main reason behind this strength.
Strong Products Distribution Lineup BSRM has appointed more than 449 dealers all over the country so that people can get BSRM products within a reasonable time. Besides, they have sales and supply depots/ office in Dhaka, Comilla, Bogra, Sylhet, Rajshahi, Barishal, Rangpur, and Khulna.
Backward-linkage Industry To strengthen the competitive advantage of the company and to minimize the dependency on import of raw materials, BSRM Group has taken initiative to establish the largest billet making plant in Bangladesh under the name of BSRM Steel Mills Limited.
Efficient Project Implementation The Company has a proven track record in implementing significant projects, with cost reduction plans and the expansion of its major production facilities, on schedule and within budget.
Quality BSRM has always maintained a strict adherence to quality control standards in their factories. The products of BSRM conform to all international quality standards. Quality is of uncompromising because of which BSRM always get a premium price for its products.
Modern Equipment & Technology The group uses the most technologically advanced machineries from reputable suppliers. Thereby it keeps operational failure is minimal. In addition, the group regularly trains their human resources to maintain updated work knowledge and efficiency.
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Successfully Completed Projects using BSRM Products
A large number of mega projects, both in private and public sectors were constructed by using MS Rods produced by Bangladesh Steel Re-Rolling Mills Limited. A few of those are as follows:
o Meghna Bridge o Meghna-Gumti Bridge o Bangabandhu Bridge, supportive projects o Dhaka City Storm Water Drainage Project o Saidabad Water Treatment Plant of Dhaka WASA o Jamuna Fertilizer Factory o Shah Amanat International Airport, Chittagong o 210MW Thermal Power Station in Rangunia, Chittagong o Army Heavy Workshop Complex in Rajendrapur Cantonment o Barapukuria Coal Mine Project in Dinajpur o Karnafully Fertilizer Factory Co. Ltd. (KAFCO) o Bashundhara City Complex o Apollo Hospital Complex o North-South University o Lafarge-Surma Cement Factory in Sylhet, etc.
MARKET FOR THE PRODUCTS OR SERVICES OF THE COMPANY
Major customers are the contractors, property developers, Export Processing Zone, Road and bridge Construction Companies etc.
RELATIVE CONTRIBUTION OF PRODUCTS CONTRIBUTING MORE THAN 10% OF THE TOTAL REVENUE
The relative contribution to sales and income of each product that accounts for more than 10% of the Company‟s total revenue as on 31 December 2013 are mentioned below:
Sl. No. Name of the products Contribution to sales (Tk.) % of contribution to Sales 1 Angles 2,604,315,788 30.27 2 Deformed Bar 1,860,789,324 21.63 3 XTREME 500W 2,558,117,543 29.74 4 Others 1,579,192,352 18.36 Total 8,602,415,008 100 %
NAME OF ASSOCIATES, SUBSIDIARY/RELATED HOLDING COMPANY AND THEIR CORE AREAS OF BUSINESS
The Company does not have any subsidiary/related holding Company other than the following two associates:
Established Name of Company Core area of Business Remarks % of share in BSRM Steels MS Rod Manufacturer 20 July 2002 Associate 31.19% Limited BSRM Steel Mills Proposed manufacturer of M.S. Billets 16 April 2008 Associate 21.76% Limited
BSRM Steels Limited: BSRM Steels Limited was incorporated on 20 July, 2002 as private limited company. The company has been listed with both Dhaka & Chittagong Stock Exchanges in 2009. This mill is having State of the Art Technology supplied by Danieli of Italy and located at Fouzderhat Industrial Area, Chittagong. It produces latest generation “Xtreme 500W” grade 500 re-bars.
BSRM Steel Mills Limited: BSRM Steel Mills Limited (BSRMSML) will be a steel melting and billet casting plant with a total installed production capacity of 862,000 MT of billets per annum. The plant
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will manufacture prime quality steel billets of 6 -12 meter length and ranging in cross section from 130 – 180 mm. The billets produced by the new plant will be consumed by two rolling mills of the BSRM Group. The project is expected to go into commercial operation at the beginning of 2015. BSRM Steel Millls Ltd has become an associate of BSRM from 11 April, 2013 with 21.76% holding.
DISTRIBUTION OF PRODUCTS OR SERVICES
Bangladesh Steel Re-Rolling Mills Limited has its own distribution channel all over the country. Moreover, it is continuously expanding its distribution network. It has around 449 authorized dealers to sell its products to the end-users. Apart from this Bangladesh Steel Re-Rolling Mills Limited have own sales and customer service offices in 08 districts including Dhaka, Comilla, Sylhet, Bogra, Khulna Barishal, Rangpur and Rajshahi to ensure prompt supply of its products to the customers along with dedicated & quality services. Since it is spread out in so many areas, there are special geographical advantages. It can reach out to potential customers all over the country, thus increasing chances of sales compared to its competitors, who have not managed to reach out their services in the similar way. Same channel is used for all BSRM products. Following figure shown the process of sales & Distribution of BSRM products:
SALES
CORPORATE OFFICE REGIONAL OFFICES (Dhaka, Comilla, Sylhet, (BSRM) Bogra, Khulna, Barishal, Rangpur and Rajshahi)
DEALERS CORPORATE CUSTOMERS END USERS
DEVELOPERS GROUP OF COMPANIES DEEMED EXPORT/EPZ EXPORT(India) (SALES Fig: Process of Sales & Distribution of BSRM Products
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MANUFACTURING PROCESS
Bangladesh Steel Re-Rolling Mills Limited has two different production steps after merger. At first step, there is a Steel Melting Works unit (previously known as Meghna Engineering Works Limited) where MS Billet is produced from scraps and sponge iron etc. By rolling this MS billet the next part of the company produces MS Rod and other MS products.
PRODUCTION PROCESS FLOW IN SMW
Billet is produced in SMW from scrap and directly reduced iron. Melted scrap and iron goes into Induction Furnace, which refines to ensure chemical composition. Then continuous casting machine cast billets as per requirement.
Scrap transfer from scrap Bin to slipper/ Trolly
by magnet
Scrap loading in vibratory feeder
by magnet
Scrap changing in furnace from feeder
by electro-mechanical vibration
Melting in IF, 7.5 MW capacity each IF (2 Nos)
Sampling after completion of melting cycle
Spectrometer test to maintain standard composition
Depending on bath composition
Primary Addition of Fe-alloy
Liquid Metal transferred to ladle for further LF process
LF processing at Ladle furnace
Sampling & Spectrometer test
Final Adjustment/ Addition of Fe-alloy
Liquid metal transferred to caster for billet casting by EOT Crane. LM carrying ladle transferred to CCM Continuousby over Casting head Machine ladle crane (2 Strand) for casting of billet
billet transfer from cooling bed to stack by magnet
Necessary physical quality inspection by the QC department
stacking in yard
Billet delivery to rolling mill
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PRODUCTION PROCESS OF RE-ROLLING MILLS
1. MS Billets of 130x130x3000mm or 100x100x3000mm of Grade 40 and 60 are used for the production of rolled products such as Re-bars, Shafts, Angles and Channels. 2. Raw Materials and Billets (common heat wise are selected as per Rolling Program.) 3. The billets of proper composition are heated in a reheating furnace of 20 ton /hr capacity as per specified heating parameters. Required Quality Checks are done on completion of this stage. 4. Hot Billets shall then enter the rolling mill and pass through 3 hi mill, Roughing (R1, R2, R3, R4), Intermediate and Finishing Stage (5A, 5B, 6, 7, 8 9th stands) and shall also achieve all the correct process parameters. Repeater or Skew tables are used alternatively. At each stage Quality Testing are carried out. 5. Quality check procedures are performed on the finished product as per the standard procedure. 6. If it passes the QC test (dimensional accuracy, bend and re bend test and tensile strength test), the rolled products are cut to length in gauge beam and shall then be weighed and tagged accordingly. The rolling process used by the factory is presented as under:
Furnace (1150⁰C)
3hi mill (7th Pass)
Roughing Mill (4 stands)
Finishing Mill (5a,5b,6,7,8,9)
Shear Machine (Fly/Crank shear)
Cooling Bed (Air cooling of Finished Product) & QC Test
Cold Shear (Cut product at Commercial length)
Fig: Production Process Flow Chart for BSRM Mills
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COMPETITIVE CONDITIONS IN THE BUSINESS
Steel consumption increases when economies are growing, as governments invest in infrastructure and transport, and build new factories and houses. Bangladesh is a developing country where GDP growth for last 3 years was around 6%. Due to increasing income level of the people of Bangladesh, government as well as individual has given priorities on the social comfort. That is why real estate and infrastructural sectors are improving day by day. To improve the social life of the people, the government has also taken various infrastructural projects viz. several flyovers in Dhaka & Chittagong including Dhaka Elevated Expressway, Dhaka-Chittagong 4-lane project including its bridges and culverts, Saidabad Water Treatment Plant 2nd Phase, Purbachal Housing Project, Tongi- Bhairab double way Rail line and many power plant projects. All these projects require huge quantity of MS Re-Bars. The biggest opportunity for Bangladesh Steel Sector is that there is enormous scope for increasing consumption of steel in almost all the sectors in Bangladesh.
Bangladesh has around 300 steel producing factories where 200 are re-rolling mills. Except for a few, most of them uses crude technology resulting in low-quality steel and mostly based on ship plates derived from ship breaking. The ship breaking industry is in a crisis because of its pollution standard and may be restricted any time, in which case there will be a huge demand for quality steel in the country.
Many reports and papers have been prepared estimating the annual demand of steel and annual demand of MS rods in the country. Exact year-to-year figures are not available. Bangladesh's annual demand for quality rod is estimated at more than 2.5 million MT, where country usually consumes over 1.7 million tones of MS road or 70 per cent of its annual demand in the peak season .The expected growth rate is approximately 10%.
Chittagong based BSRM Group is the market leader in the steel sector. Other main competitors are Abul Khair Steels Limited (AKS), Kabir Steel Re-Rolling Mills Limited(KSRML), Seema Steel Re- Rolling Mills Limited(Seema) , Rahim Steel Mills Limited(RSML), GPH Ispat Limited (GPH), Ratanpur Steels Limited, Baizid Steel, Anwar Ispat Limited who are producing about 30% of total quality steel demand of Bangladesh.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF PRINCIPAL SUPPLIERS
Scrap Supplier Scrap is the main raw materials for the Steel Melting Works, which is imported from abroad as well as from local suppliers. Major scrap & sponge iron suppliers are as follows:
Sl Name of the Suppliers Address 1 Bismillah Enterprise 410,Sagarika Road, Pahartoli, Ctg 2 F.B Steel 263,Ashraf Ali Road, Phatharghata, Ctg. 3 J.N Entrerprise 211,D.T Road, West Madarbari, Ctg. 4 M. Rahman & Brothers Shah Amanat International Airport, South Potenga, Ctg 5 Nizam Enterprise Six Floor,Shahi Jame Masjid Market, Women College Moor,Jakir Hossain Road, Ctg. 6 Mansur & Brothers 96,Abdul Khalek Market,Muradpur,Hathazari Road, Ctg. 7 Muradpur Iron Mart 365,Abdul Hakim Market,Hathazari Road, Bibirhat, CTG 8 Pioneer Trading Rosul Hoque Market, Near BMA Gate, Bhatiary, Sitakunda, Ctg. 9 Rayhan Enterprise Rayhan Plaza, Near BMA Gate, Bhatiary,Sitakunda, Ctg. 10 JINSU Resources Ltd. Unit 1601, The Phoenix, 21-25 Luard Road, Wanchai, Hong Kong 11 TSR Recycling GmbH & Co. KG Im- and export, Hovestrasse 30,20539 Hamburg, Germany. 12 SIMS Group Global Trade 110 Fifth Avenue, Suite 700, New York, NY 10011, USA Corporation
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13 Van Dalen International B.V. Graanweg 18 Haven NR. M225, 4782 PP Moerdijk, The Netherlands. 14 B.F.R.S (UK) LIMITED. ista Business Centre, 50 Salisbury Road, Heathrow, Middlesex, TW4 6JQ, United Kingdom 15 Kawamin Pacific PTI Ltd. Beach Road No. 05.-00, Evershine and Century Complex, Singapore-189681. 16 M/s. Cargill International Trading Pte 300 Beach Road, HEX23-10, The Concourse, Singapore-199555 Ltd. 17 Bunty Overseas Pvt. Ltd. 4, Fairlie Place, H.M.P. House, Mezannine Floor, Room No.14, Kolkata-700001, West Bengal, India.
Billets Suppliers Company uses billets as raw materials for its Re-Rolling Mills and SMW cannot fulfill its requirement. Therefore, it has to import billet from abroad as well. Major Billets suppliers are as follows:
Sl Name of the Suppliers Address 302, Patel Estate, B-40, New Link Road, Andheri(West), Mumbai- 1 M/s. Maithan International 400053, India. M/s. Patnaik Steels and Alloys 2 A/22, Cuttack road, Falcon House. 1st fl, Bhubaneswar-751006, India Ltd 39, Shakespeare Sharani, Premlata, 3rd floor, Kolkata-700 017, west 3 M/s. Super Smelters Limited bengal, India 4 S K Network Korea 717-3 Hakjang-Dong, Sesang-Gu, Busan , Korea 5 Deahan Steel Co. Ltd 370-16, Sinoyong-Dong, Sha-Gu, Busan, Korea. 600 North Bridge Road, No.06-03, Park View Square, Singapore- 6 Duferco Asia Pte Ltd 188778 M/s. Concast Bengal 7 21, Hemant Basu Sarani, Suite # 511 & 512, Kolkata-700001, India. Industries Limited 8 Haldia Steels Ltd 37, Shakespeare Sarani, Kolkata-700017, West Bengal, India. 9 Maithan Ispat Limited 6 G-Everest, 46 C, Jawaharlal Nehru road, Calcutta, India 31 Shakespeareare Sarani, Jasmine Tower, 6th Fl Room. 611, kolkata- 10 Bhushan Steel Limited 700017, india 11 M/s Gayson & Co Pvt Ltd PO Banskopa, Durgapur, Disc Burdwan, West Bengal 12 M/s Sesa International ltd PO Banskopa, Durgapur, Disc Burdwan, West Bengal 13 Jai Balaji Industries Ltd Unit -2 Regd. Office :68A, Ballygunge Circular Road, Kolkata - 700 019, India
The new billet making project in Mirsarai, Chittagong is expected to be completed at the end of 2014 and then BSRM will be able to procure its balance raw material (billet) from this project in addition to its existing melting unit.
SOURCES OF AND REQUIREMENT FOR POWER, GAS AND WATER
Power Connected load for BSRM Group is 60,000 KW from which four group concerns including BSRM get power supply under an agreement among BSRM, PGCB and the BPDB. Current requirement for four sister concern is 42-45 MW and the existing load will be enough for the new expansion. Sources of power supply for two factories of the BSRM are as follows:
Requirement Unit (MW) Supply Unit (MW) Sources Re-Rolling Mills SMW Total Re-Rolling Mills SMW Total Bangladesh Power 3.2 16.5 19.7 4 19 23 Development Board (BPDB)
In addition, re-rolling unit has 2 diesel generators with a capacity of 250 KVA and 231 KVA respectively and Steel melting unit has 2 more diesel generators having capacity of 328 KVA each.
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Gas: Requirement of gas supply is ensured from Karnafuly Gas Distribution Co. Limited for two factories of the BSRM is as follows:
Requirement (m3/month) Supply (m3/month) Re-Rolling Mills SMW Re-Rolling Mills SMW 351,104 98,424 351,813 107,848
Existing connected load of gas for the mill is sufficient but it will not be sufficient for the new expansion. The company applied for 1,898,832 m3/month load of gas approval of which is expected very soon. Notable strength of the new project is the dual fired furnace will be. HSFO (High Sulfur Furnace Oil)/ Light Diesel Oil can be used for new machineries in case of gas crisis.
Water: Currently water supply is ensured from own deep tube well which is as follows:
Particulars Re-Rolling Mills ( m3/hour) SMW( m3/hour) Total Water Supply Capacity 30 20 Total Water Requirement 15 20
NAME OF CUSTOMERS/DEALERS WHO PURCHASE 10% OR MORE OF THE COMPANY’S PRODUCTS
There is no single customer who purchases more than 10% of the company‟s products.
CONTRACT WITH PRINCIPAL SUPPLIERS AND CUSTOMERS
The company does not make any specific agreement with the suppliers. However, when the purchase order is raised, contract is made specifying the delivery amount, timing of delivery, advance deposit amount, credit terms and other conditions.
Currently, the company has 540 numbers of dealers who are from different regions/belts but have contractual agreements with the company on following conditions as on 31 December 2013.
Nature of Credit: Every dealers must sign a credit agreement on stamp paper to be worthy of purchasing on credit. All dealers under such agreement must provide valid security instruments (Bank guarantee or open dated cheque covering full credit amount) before commencing purchase on credit.
Limit: Letter of assignment of credit limit in tons and a time limit in weeks. (Up to Tk.1 crore by National sales head & above 1 Crore by the ED/ Director)
Duration: Credit limit in days will be 21 days for dealers. In the case of sales on credit against payment by the L/C specially to dealers, Credit period will be calculated from the LC opening date or the date of Sales confirmation whichever is earlier.
Initially new proposed dealer shall be treated as Trial dealers for the first 3 (Three) months. Applicants will get discount equivalent to that of Traders for the trial period. Trial dealers will be elevated to the category of dealers only upon satisfactory performance throughout their trial period. BSRM signboard to be fixed in dealers shop and cost to be paid by dealer in advance.
MATERIAL PATENTS, TRADEMARKS, LICENSES OR ROYALTY AGREEMENTS
Management sharing agreement with BSRM Steels Ltd
The company entered into a Management sharing agreement with its associate company BSRM Steels Limited on 15th October 2005 for using the goodwill of BSRM, its expertise in marketing, procurement, Management etc. Main features of the agreement are as under:
i) Scope of Work : Sharing of Management expertise, purchase activities, commercial activities, clearance of all imports from Chittagong / Benapole, Marketing activities etc.
ii) Service fees : Tk. 250 per ton of actual production per month provided BSRM Steels Limited has net profits in their books and was revised at Tk 300 per ton effective from 1 April 2013.
iii) Validity : Upto 31st March 2018. Page | 37
Licenses
Name of Licenses/Certificate Units Valid period Re-Roling Mills 30.06.2015 Fire License SMW 30.06.2015 Trade License BSRM 30.06.2015 ISO Certificate (14001:2004) Re-Roling Mills 04.07.2015 SMW 04.07.2015 ISO Certificate (9001:2008) Re-Roling Mills 04.07.2015 SMW 04.07.2015 Re-Roling Mills 23.04.2015 Environment Certificate SMW 18.10.2015 Export License BSRM 2014-2015 Import License BSRM 2014-2015
BSRM has no registered trademark, in respect of goods, name and trading style.
EMPLOYEES POSITION 31 Dec 2013 31 Dec 2012 Particulars Full-time Part-time Full time Part time No of employee whose salary was below Tk. 3000 Nil Nil Nil Nil No of employee whose salary was above Tk. 3000 718 Nil 712 Nil
PRODUCTION CAPACITY AND CURRENT UTILIZATION
Particulars 31 Dec 2013 31 Dec 2012
Yearly Installed Capacity(M.Ton) MS Rod, Angle Channel etc 120,000 120,000 Yearly Production (M. Ton) MS Rod, Angle Channel etc 106,810 94,127 Capacity Utilized (%) MS Rod, Angle Channel etc 89.01% 78.44%
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SECTION VI
DESCRIPTION OF PROPERTY
A) The Company owns the following fixed assets at written down value as on 31 December 2013.
(As per audited accounts)
Written Down Value as on Written Down Value as on 31 Name of the Assets 31 December 2013 December 2012
Land and Land development 3,773,227,092 3,770,747,745 Plants and Machineries 2,463,365,760 2,459,282,618 Motor Vehicles 30,746,136 34,220,974 Factory building & Shed 696,376,719 410,691,898 Furniture and Fixtures 24,769,949 25,320,282 Office Equipments 17,628,973 16,888,807 Total 7,006,114,629 6,717,152,324
B) All the above-mentioned assets are situated at Company‟s Factory site and are in good operational condition.
C) Total area of land owned by the Company is 28.42855 acre of which freehold land is 20.52355 acres and leasehold land is 7.905 acres. Entire land has been duly mutated and rent was paid regularly except ongoing process of transfer in legal title of 1.98 acre land from MEW to BSRM. The land being leased by Public Works Departments (PWD), the transfer of name requires approval from Ministry of Housing and Public Works (MOHPW). In response to BSRM application dated 13th September 2011 MOHPW‟s asked for additional documents on 1 January 2014 and accordingly BSRM submitted required documents on 19 January 2014. It is expected that the permission will be available shortly. The leasehold land was allotted by the Government of the People‟s Republic of Bangladesh under 99 years lease term. Details of these leasehold lands are given below:
Location Lease taken from Lease period Deed date Area in Acre Chittagong Factory Public Works Departments (PWD) 99 Years 22.06.1968 2.790 (Re-Rolling Unit) Chittagong Factory Public Works Departments (PWD) 99 Years 03.06.1959 1.980 (Melting Unit) Chittagong Factory Public Works Departments (PWD) 99 Years 22.06.1968 3.135 (Re-Rolling Unit) Total 7.905
D) Advance against land purchase as on 31 December 2013 amounting to Tk 17,282,327 of which Tk 16,462,327/-represents payment against purchase of a land of 38.66 decimals and Tk 820,000/- against purchase of a land of 0.81 decimals land. Due to unusual delay in providing the valid ownership the company has subsequently cancelled the agreement and taken back the entire advance money of Tk 16,462,327/- on 21 January 2014 and Tk. 8,20,000/- on 28th February 2014.
E) Company has acquired all assets in new condition.
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F) All the owned assets of the Company as described above are mortgaged to different banks to obtain loan facilities as mentioned in the note no. 17 & 20 of the financial statement as on 31 December 2013. The following are the current mortgagees of the company:
AB Bank Ltd International Leasing & Financial Services Ltd One Bank Ltd Agrani bank Ltd Islami Bank Bangladesh Ltd Prime Bank Ltd Al-Arafah Islami bank Ltd IPDC of Bangladesh Ltd Pubali Bank Ltd Bank Al-Falah Ltd Jamuna Bank Ltd State Bank of India Basic Bank Ltd Lankabangla Finance Limited Standard Bank Ltd Dhaka Bank Ltd MIDAS Financing Ltd Standard Chartered Bank Ltd Dutch Bangla Bank Ltd Mercantile Bank Ltd Shahjalal Islami Bank Ltd Habib Bank Ltd National Housing Finance and Investment Ltd Sonali Bank Ltd HSBC Ltd NCC Bank Ltd Social Islami Bank Ltd IFIC bank Ltd National Bank Ltd Trust Bank Ltd IDLC Finance Ltd Fareast Finance & Investment Ltd United Commercial Bank Ltd United Leasing Co. Ltd
G) Auditors’ certificate regarding Plant & Machineries:
This is to certify that as appeared from our examination of books and records maintained by Bangladesh Steel Re- Rolling Mills Ltd. And as produced to us for verification, and explanations given by the management, plant and machineries owned by the company are neither reconditioned nor secondhand.
Date: 19 January, 2014 Sd/- Rahman Rahman Huq Chartered Accountants
H) Management Declaration regarding Plant & Machineries:
We do hereby declare that, we are not owning and using any recditioned or secondhand plant and machinery for manufacturing MS Products at our factory.
Date: January 12,2014 Sd/- Alihussain Akberali, FCA Managing Director
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SECTION VII
FINANCIAL CONDITION AND PLAN OF OPERATION
INTERNAL AND EXTERNAL SOURCES OF FUND (As per audited accounts) Particulars 31 Dec. 2013 31 Dec. 2012 31 Dec. 2011 Internal Sources of Fund Share Capital 1,558,510,380 1,558,510,380 643,454,910 Proposed Bonus Share - - Reserve for issuance of shares against - - 271,600,560 Merger Revaluation Reserve 4,129,104,568 4,189,255,118 1,619,084,375 General reserve 30,170,818 30,170,818 30,170,818 Retained Earnings 2,398,521,265 1,747,355,332 1,840,565,341 Fair Value Reserve 2,439,152 1,023,492 - Sub-total 8,118,746,183 7,526,315,140 4,404,876,004 External Sources of Fund Short Term Bank Loan 3,631,028,292 3,351,042,310 3,198,571,591 Long Term Loan 1,898,882,168 1,545,166,504 710,907,356 Inter Company Loan 2,401,210,345 369,924,616 2,485,811,812 Sub-total 7,931,120,805 5,266,133,430 6,395,290,759 Total 16,049,866,988 12,792,448,570 10,800,166,763
MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURES & SOURCES OF FUND
There are no material commitments for Capital expenditures except capital expansion as mentioned in the utilization of IPO proceeds of the Prospectus.
CAUSES OF ANY MATERIAL CHANGES FROM PERIOD TO PERIOD
The management of the Company is always attempting to maximize production with cost efficiency; Particulars 31 Dec. 2013 31 Dec. 2012 31 Dec. 2011 Sales 8,602,415,008 14,043,421,488 12,664,400,034 Cost of goods sold (8,102,322,738) (13,345,900,813) (11,587,854,913) Gross profit 500,092,270 697,520,675 1,076,545,121 Other income 6,652,224 108,231 4,913,100 Operating Expenses (221,755,919) (211,445,865) (215,558,391) Administrative Expenses (166,109,408) (176,030,894) (177,468,781) Selling and Distribution Expenses (55,646,511) (35,414,971) (38,089,610) Profit from Operations 284,988,575 486,183,041 865,899,830 Financial Expenses (264,396,406) (278,832,330) (410,009,134) Loss on Revaluation of Property, Plant - (28,023,369) - & Equipment Financial Income 23,390,549 34,150,796 36,259,657 Net Profit before WPPF 43,982,718 213,478,138 492,150,353 Contribution to WPPF & WF (2,199,136) (10,673,907) (24,607,518) Non Operating Income 169,063,732 150,068,986 1,082,183,306 Share of profit of associate (Net of tax) 934,127,635 312,954,478 289,208,916 Profit before income tax 1,144,974,949 665,827,695 1,838,935,057 Current Tax (124,274,416) (188,224,809) (256,237,264) Previous year‟s Tax (6,612,039) (87,652) (18,947,986) Deferred Tax (225,386,883) (23,591,047) (412,951,888) Net Profit after Tax 788,701,611 453,924,187 1,150,797,919
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Net profit after tax of the company increased during the year 2013 though turnover of the company decreased significantly, mainly due to increase in share of profit in associate company as shown under equity method as per BAS. On the other side, net profit after tax (NPAT) of the company in FY 2011 has also significantly increased due to contribution of capital gain under non operating income from disposal of shares of BSRM Steels Limited.
Turnover of the company increased all the years except financial year 2013 when it reduced significantly due to political unrest of the country throughout the year.
SEASONAL ASPECTS OF THE COMPANY’S BUSINESS
There is no direct seasonal implication in the products of the company. However, during the rainy season the business of the company slightly hampered due to low level of construction.
KNOWN TRENDS, EVENTS OR UNCERTAINTIES
Increased price of raw materials in international market, scarcity of funds (liquidity crisis), economic recession, and entrance of new technology, changes in government monetary & industrial policy, increasing competition, power supply disruption and political unrest are known events that may affect the productivity as well as growth of the company.
CHANGES IN THE ASSETS TO PAY OFF LIABILITIES
None of the operating assets has been used to pay off any liabilities of the Company.
LOAN TAKEN FROM OR GIVEN TO THE HOLDING/PARENT COMPANY OR SUBSIDIARY COMPANY
BSRM does not have any holding or subsidiary company, so there are no transactions in this respect. However, BSRM have intercompany transactions between its sister concerns which has been presented in the “Certain relationship and related transaction” part of this prospectus.
FUTURE CONTRACTUAL LIABILITIES
The Company has no plan to enter into any contractual liabilities within next one year other than normal course of business.
FUTURE CAPITAL EXPENDITURE
The Company has no plan for future Capital Expenditure except the ongoing modernization and expansion of capacity.
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VAT, INCOME TAX, CUSTOM DUTY AND OTHER TAX LIABILITIES
VAT
The company does not have any outstanding VAT up to 31 December 2013 except the following disputed case pending before Honorable High Court. No Provision is made against below mentioned VAT (shown as contingent liabilities accounts note no 38)
Writ/Order No. Remarks 5696 of 2003 Writ petition has been filed in respect of value addition under VAT Act 1991, which is pending for hearing before the High Court Division of Supreme Court and amount of liability cannot be estimated at this stage. 2667 of 2004 The company has VAT liability amounting Tk. 100,000 as on 31 December, 2003, which is imposed by VAT Authority in 2004 as penalty. The case is now pending for hearing before the High Court Division of Supreme Court.
6278 of 2004 The company has VAT liability amounting Tk. 178,415 as on 31 December, 2004 against trade VAT which is not settled yet. The case is now pending for hearing before the High Court Division of Supreme Court 2666 of 2004 The company has VAT liability amounting Tk. 536,174 as on 31 December, 2004, which is demanded by VAT authority in 2004 for difference in selling price. The case is now pending for hearing before the High Court Division of Supreme Court 1843 of 2011 Writ petition has been filed against percentage of wastage (4% in place of 2.50%) in 2011, which is pending for hearing before the High Court Division of Supreme Court and amount of liability cannot be estimated at this stage.
Income Tax As per certificate of the Deputy Commissioner of Taxes, BSRM is an assessee of Taxes Circle- 2(companies) taxes zone-1, Chittagong. The assessment of the company has been completed up to assessment year 2013-2014. Year wise income tax status of the company for last five years is depicted below:
Assessment Status Year As per certificate given by DCT of Companies circle-2, Zone-1, Chittagong, dated 14.10.2009 the company‟s income tax case settled up to Assessment year 2009-2010. 2009-2010 The company has one pending issue with Megna Engineering Works Ltd which is now merged with BSRM. 2010-2011 As per certificate given by DCT of Companies circle-2, Zone-1, Chittagong, dated 02.09.2010 the company‟s income tax case settled up to Assessment year 2010-2011. 2011-2012 As per certificate given by DCT of Companies circle-2, Zone-1, Chittagong, dated 21.08.2011 the company‟s income tax case settled up to Assessment year 2011-2012. 2012-2013 As per certificate given by DCT of Companies circle-2, Zone-1, Chittagong, dated 31.07.2012 the company‟s income tax case settled up to Assessment year 2012- 2013. 2013-2014 As per certificate given by DCT of Companies circle-2, Zone-1, Chittagong, dated 28.07.2013the company‟s income tax case settled up to Assessment year 2013-2014. The company has no outstanding income tax up to 31 December 2013 except the following disputes/cases pending before Honorable High Court:
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Assessment Writ No. Unit Status Year Income Return was submitted on 4/9/2001 The DCT completed the (AY 2001-02) Assessment under Section 82B of ITO 1984 and issued a Demand Notice of Tk.48,97,822/-including panel interest of Tk.88,067/- against which the Company filed an appeal to the Re- Commissioner Appeal. Finally the Company filed an appeal to the 2001-2002 2814/2003 Rolling Appellate Tribunal against the order of Commissioner Appeal. After Mills having order from the appellate tribunal the Company referred to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk. 49,00,000 as on 31 December, 2000. Income Return was submitted on 15/7/2002 The DCT completed the (AY 2002-03) Assessment under Section 83 (2) of ITO 1984 and issued a Demand Notice of Tk. 119,90,059/-including panel interest of Tk.244,731/- against which the Company filed an appeal to the Re- Commissioner Appeal. Finally the Company filed an appeal to the 2002-2003 288 of 2004 Rolling Appellate Tribunal against the order of Commissioner Appeal. After Mills having order from the appellate tribunal the Company referred to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk. 1,05,61,562 as on 31 December, 2001. Income Return was submitted on 15/7/2003. The DCT completed the (AY 2003-04) Assessment under Section 82 B of ITO 1984 and issued a Demand Notice of Tk.117,07,078 including panel interest of Tk.13,445/-against which the Company filed an appeal to the Commissioner Appel. Finally the Company filed an appeal to the 2003-2004 287 of 2004 SMW Appellate Tribunal against the order of Commissioner Appeal. After having order from the appellate tribunal the Company referred the matter to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk. 1,47,64,000 as on 31 December, 2002. Income Return was submitted on 14/7/2005. The DCT completed the (AY 2005-06) Assessment under Section 83 (2) of ITO 1984 and issued a Demand Notice of Tk. 141,00,603/- against which the Company filed an appeal to the Commissioner Appeal. Finally the Re- Company filed an appeal to the Appellate Tribunal against the order 2005-2006 64 of 2007 Rolling of Commissioner Appeal. After having order from the appellate Mills tribunal the Company referred the matter to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk. 98,61,000 as on 31 December, 2004. Income Return was submitted on 14/7/2005 The DCT completed the (AY 2005-06) Assessment under Section 82B of ITO 1984 and issued a Demand Notice of Tk.179,88,206/- against which the Company filed an appeal to the Commissioner Appeal. Finally the Company filed an appeal to the Appellate Tribunal against the order 2005-2006 471 of 2006 SMW of Commissioner Appeal. After having order from the appellate tribunal the Company referred the matter to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk.32,66,000 as on 31 December, 2004. Income Return was submitted on15/7/2009. The DCT completed the (AY 2009-10) Assessment under Section 82B of ITO 1984 and issued a Demand Notice of Tk. 178,53,271/- against which the Company filed an appeal to the Commissioner Appeal. Finally the Company filed an appeal to the Appellate Tribunal against the order 2009-2010 532 of 2011 SMW of Commissioner Appeal. After having order from the appellate tribunal the Company referred the matter to the High Court Division in the prescribed from and prescribed manner. Now the matter is pending with High Court. The disputed amount is Tk. 23,20,000 as on 31 December, 2008.
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Customs Duty and other Tax Liabilities
No custom duty or similar liabilities of the Company are outstanding as on 31 December 2013.
OPERATING LEASE DURING LAST FIVE YEARS
BSRM did not have any operating lease commitments with any organization during last five years.
FINANCE LEASE COMMITMENT DURING LAST FIVE YEARS
BSRM maintains two finance leases during last five years. Major features of these leases are as follows:
Name of the Financial Effective date Monthly Rent Period Expiration of Lease Institutions of Lease MIDAS Financing Limited 15.03.2008 1,388,200 5 Years Expired on 25.03.2012 United Leasing Company Limited 14.09.2007 1,155,878 5 Years Expired on 14.09.2012
PERSONNEL RELATED SCHEMES
The Company believes in supporting its employees and offering incentives and bonuses for its continued profitability and growth. With a view to supporting these objectives, Bangladesh Steel Re- Rolling Mills Limited operates a contributory Provident Fund and Gratuity scheme. Moreover, company also introduces workers Profit Participation and Welfare Fund facilities for the employees as per Labour Act 2006. Short descriptions about them are presented below.
Provident Fund
The Company has been maintaining a recognized contributory provident for all eligible permanent employees. The fund is administrated by a Board of Trustee and is funded by 10% contributions from the salaries equally by the employees and the Company. The fund is managed distinctively from the Company‟s assets.
Gratuity
The Company also maintains non-funded gratuity scheme for the confirmed employees of the Company.
WPPF
The company is paying @5% of its operating profit to all workers as per Labor Act, 2006.
Group Insurance Policy
On April 2014 the company has made group insurance policy covering accidental death, Permanent and partial disability benefits with Delta Life Insurance Company Ltd.
Encashment of leave and Medical Treatment Facility
Employees of Bangladesh Steel Re-Rolling Mills Limited enjoy encashment against leave eligible for its employees. Apart from this the employees enjoy medical treatment facility for any kind of injury during the course of their service in the company.
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BREAK DOWN OF ISSUE EXPENSES
Total IPO expenses are estimated as follows:
Particulars Basis Amount in Tk. Manager to the Issue Lump sum 2,000,000 VAT Against Management to the Issue Fee 300,000 Credit Rating Fee Lump sum 350,000 BSEC Fees Application Fee Fixed 10,000 Consent Fee @ 0.15% on entire offer 918,750 Fees Related for Listing with Stock Exchanges Application fee for DSE & CSE Fixed 10,000 Annual Fee for DSE & CSE Fixed 200,000 @ 0.25% on 10.00 crore and @ 0.15% Listing Fees of Stock Exchanges (DSE & CSE) for the rest amount of paid up capital 4,000,000 But not more than 2 million each CDBL fees and expenses Documentation fee 2,500 Security Deposit 500,000 Initial Public Offering fee 0.025% on Total IPO 153,125 Annual fee 100,000 Commission Expenses Underwriting Commission 0.50% 1,531,250 0.10% on collected amount Bankers to the Issue Commission 3,062,500 (Assume 5 times)
Expenses related to Printing, Publication & Lottery Publication of Abridged version of Prospectus Four National Dailies 900,000 Printing of Prospectus 4,000 pcs. X TK. 80 per Copy 320,000 Printing of Forms 6,00,000 pcs. X TK. 1.5 per Copy 900,000 Post issue Expenses Application @ Tk. 11.50 P/A 5,031,250 Arrangement of Lottery Estimated 700,000 Total Estimated Expenses 20,989,375 N B: Actual costs will vary if above mentioned assumptions differ and will be adjusted accordingly.
REVALUATION OF ASSETS
The Company first revalued its fixed assets in the year 2008 by Hoda Vasi Chowdhury & Co. Chartered Accounts, which have been reflected in the financial Statements of the Company as on 31 December 2008. The summery of revaluation made on 28 December 2008 are as follows:
Value of Assets Value of Assets after Net Revaluation Particulars of the assets before revaluation revaluation Surplus Land 62,992,462 795,670,000 732,677,538 Building & Factory Shed 75,982,666 173,379,720 97,397,054 Motor Vehicles 10,719,236 14,630,000 3,910,764 Furniture and Fixture 4,506,778 4,052,861 (453,917) Office Equipments 1,390,624 925,750 (464,874) Plants and Machinery 158,089,769 651,513,000 493,423,231 Electric Installation 28,424,368 200,721,642 172,297,274 Other Assets 32,553,695 207,166,801 174,613,106 Total 374,659,598 2,048,059,774 1,673,400,176
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Again the company revalued its fixed assets as on 31 December 2011 by the same valuer which has been incorporated in the financial statements of the company as on 31 December 2012. The summery of revaluation made on 1 August 2012 are as follows:
Value of Assets Value of Assets after Net Revaluation Particulars of the assets before revaluation revaluation Surplus Land 2,254,278,307 3,693,022,500 1,438,744,193 Building & Factory Shed 364999779 426,917,030 61,917,251 Motor Vehicles 21,569,198 35,542,683 13,973,485 Furniture and Fixture 9,125,200 10,915,425 1,790,225 Office Equipments 24,237,984 29,276,089 5,038,106 Plants and Machinery 1,716,001,835 1,995,837,589 279,835,752 Electric Installation 416,088,105 591,247,782 175,159,678 Other Assets 3,477,532 3,252,370 (225,162) Total 4,809,777,940 6,786,011,467 1,976,233,527
Reason for Revaluation : To incorporate the fair present value of the fixed assets of the Company into the financial statements according to the requirements of Bangladesh Accounting Standard 16 (Property, Plant & Equipment). Name of Valuer : Hoda Vasi Chowdhury & Co. Qualification of the Valuer : Chartered Accountants Date of Revaluation : 01 August 2012. Major Revaluation Works : 1) Western Marime Shipyard Ltd. Ctg. 2) Natural LP Gas Ltd. Ctg. 3) UITS, Khulsi, Ctg.
TRANSACTIONS BETWEEN HOLDINGS/SUBSIDIARY/ASSOCIATE COMPANY AND THE ISSUER
The company does not have any Subsidiary or Related holding company. BSRM has two associate companies namely BSRM Steels Ltd and BSRM Steels Mills Ltd as on 31 December 2013. The transaction has been made during the last five years with BSRM Steels Ltd are as follows:
Name of Relationship Types of Balance as on Issuer the parties transactions 31-Dec-13 31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 Status BSRM Associate Purchase of (3,563,424,229) (2,775,603,565) (2,530,402,254) - (336,412,600) Cr Steels Ltd finished goods Short term (2,375,947,711) (362,970,206) (2,471,446,838) (1,779,420,958) (893,362,894) Cr loan BSRM Associate Short term 252,410,775 68,027,565 (39,925,255) Dr Steels Mills loan Ltd Share money 900,000,000 Dr deposit
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AUDITOR'S CERTIFICATE REGARDING ALLOTMENT OF SHARES FOR ANY CONSIDERATION OTHER THAN FOR CASH
This is to certify that as per share register and other relevant records maintained by Bangladesh Steel Re-Rolling Mills Limited, the company did not allot any shares for consideration other than for cash to any directors, subscribers to the Memorandum of Association (MA) and Articles of Association (AA) and other shareholders up to 27 May 2013 except as shown below:
*No. of Shares Sl Allotted in Amount Date of allotment Issued to at Face value No Consideration (Tk.) of Tk. 10 each 1 May 30, 1961 Subscribers to MA and Against Assets 45,000 450,000 2 December 4, 1962 AA Against Assets 70,850 708,500 3 December 15, 1965 Bonus 50,000 500,000 4 December 31, 2006 Bonus 958,500 9,585,000 Directors and other 5 September 22, 2007 Bonus 1,581,520 15,815,200 shareholders 6 January 31, 2010 Bonus 12,125,020 121,250,200 7 January 10, 2011 Bonus 5,375,451 53,754,510 Shareholders of Meghna Assets and liabilities Engineering Works against merger with 8 September 30, 2012 27,160,056 271,600,560 Limited against Meghna Engineering consideration for merger Works Limited Directors and other 9 November 12, 2012 Bonus 64,345,491 643,454,910 shareholders Total 111,711,888 1,117,118,880
*Face value of ordinary shares of Taka 100 each was changed to Taka 10 each on November 03, 2009 by virtue of a special resolution passed in the Extra Ordinary General Meeting held on November 03, 2009. Numbers of shares issued to subscribers to MA and AA, director and other shareholders prior to 2009 have been adjusted to give effect of change in face of ordinary shares to ensure comparability and better presentation. Sd/- Rahman Rahman Huq. Date: 27 May 2013 Chartered Accountants
MATERIAL INFORMATION HAVING AN IMPACT ON THE AFFAIRS OF THE COMPANY
There is no other material information, which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public.
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SECTION VIII
DIRECTORS AND OFFICERS
INFORMATION REGARDING DIRECTORSHIP
Expiry of Sl. Name of the Age Present Educational Date of first Experience Current No Directors (Years) Position Qualification Directorship (Years) Term Chairman & Mr. Alihussain Chartered 1 63 Managing 07/10/1980 ** 33 Akberali, FCA Accountant Director Director Graduated in 2 Mr. Zohair Taherali 49 16/08/1988 ** 25 Commerce. Mr. Aameir 3 37 Director MBA 17/03/2002 ** 11 Alihussain Mrs. Tehseen 4 42 Director Graduate 03/02/1999 ** 14 Zohair Taherali Mrs. Sabeen 5 35 Director MBA 24/10/2009 ** 4 Aameir
** As per Articles of Association of the company, one-third of the directors or if their number is not three or multiple of three then the number nearest to one-third shall retire from office by rotation at the Annual General Meeting.
INVOLVEMENT OF DIRECTORS WITH OTHER COMPANIES
Name Company Name Relationship
BSRM Steels Limited Chairman Karnafully Engineering Works Limited Chairman BSRM Wires Limited Managing Director BSRM Recycling Limited Managing Director BSRM Iron & Steels Co Limited Chairman & MD Chittagong Power Company Limited Chairman & MD Bangladesh Steels Limited Director Mr. Alihussain Akberali, FCA* East Bengal Trading & Industrial Corporation Limited Director BSRM Ispat Limited Director Section steel Industries Limited Managing Director BSRM Steels Mills Limited Chairman BSRM Logistics Limited Chairman BSRM Real Estates Limited Chairman BSRM Metals Limited Chairman H Akber Ali & Co Managing Director BSRM Steels Limited Director Karnafully Engineering Works Limited Managing Director BSRM Wires Limited Chairman BSRM Recycling Limited Chairman BSRM Iron & Steels Co Limited Director Chittagong Power Company Limited Director Bangladesh Steels Limited Chairman East Bengal Trading & Industrial Corporation Limited Chairman Mr. Zohair Taherali BSRM Ispat Limited Chairman BSRM Steel Mills Limited Director BSRM Logistics Limited Managing Director Burhani Scrap Traders Partner H. Akber Ali &Co Director BSRM Real Estates Limited Director BSRM Metals Limited Director
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BSRM Steels Limited Managing Director Karnafully Engineering Works Limited Director BSRM Wires Limited Director BSRM Recycling Limited Director BSRM Iron & Steels Co Limited Director Chittagong Power Company Limited Director Bangladesh Steels Limited Managing Director East Bengal Trading & Industrial Corporation Limited Managing Director Mr. Aameir Alihussain BSRM Ispat Limited Managing Director Section steel Industries Limited Director BSRM Steel Mills Limited Managing Director BSRM Logistics Limited Director Burhani Scrap Traders Partner H. Akber Ali &Co Director BSRM Real Estates Limited Managing Director BSRM Metals Limited Managing Director BSRM Steels Limited Director Karnafully Engineering Works Limited Director BSRM Wires Limited Director BSRM Recycling Limited Director BSRM Iron & Steels Co Limited Director Bangladesh Steels Limited Director Mrs. Tehseen Zohair Taherali East Bengal Trading & Industrial Corporation Limited Director BSRM Ispat Limited Director BSRM Steels Mills Limited Director H. Akber Ali &Co Director BSRM Real Estates Limited Director BSRM Metals Limited Director
BSRM Steels Limited Director Mrs. Sabeen Aameir BSRM Iron & Steels Co Limited Director (Representative director of H. Akberali & Co. Ltd) *Permision from the Ministry of Commerece has been obtained to act Mr. Alihussain Akberali, FCA as Managing Director of avobe mentioned 06 (six) Companies ( Ref No: evg/wU I-1/46/2013/98)
FAMILY RELATIONSHIP BETWEEN DIRECTORS AND OFFICERS
Name Position Relationship Mr. Alihussain Akberali, FCA Chairman & Managing Director Self Mr. Zohair Taherali Director Cousin of Mr. Alihussain Akberali Mr. Aameir Alihussain Director Son of Mr. Alihussain Akberali Mrs. Tehseen Zohair Taherali Director Wife of Mr. Zohair Taherali Mrs. Sabeen Aameir Director Wife of Mr. Aameir Alihussain
SHORT BIO-DATA OF DIRECTORS
Mr. Alihussain Akberali, FCA, Chairman & Managing Director Mr. Alihussain Akberali was born in 1949. His father late Akberali Alibhai Africawala was a renowned businessman in steel sector. Mr. Alihussain Akberali is a graduate in commerce from University of Karachi, Pakistan. He is a Chartered Accountant and a fellow member of the Institute of Chartered Accountants of Bangladesh. He is one of the most experienced industrialists in steel sector. He is the Chairman of BSRM Group of Companies. Mr. Alihussain Akberali has been selected as CIP for 2010- 11. Previously, he was also selected CIP in 1995, 1996, 1997, 2001, 2008 and 2009-10.
In Business circle he is considered as an epitome of enterprise for his integrity and hard work. Currently Mr. Alihussain is the Vice Chairman of Chittagong Metropolitan Chamber of Commerce and Industry. Mr. Alihussain Akberali is engaged in various social activities like Rotary Club, Chittagong Ma O Shishu Hospital, Chirayata Shanti Society, Patient Welfare Samitee of Chittagong Medical College etc. He has also beem running a free school for the underprivileged boys and girls in Nasirabad Industrial area for the last 8 years.
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Mr. Zohair Taherali, Director Mr. Zohair Taherali is involved with steel industry for last 20 years. He was born in 1963. Graduated from University of Karachi, Pakistan in Commerce, he has established himself as one of the leading industrialist of the Country. He mainly looks after the banking and financial side of the Company. He is also engaged in various social activities.
Mr. Aameir Alihussain, Director Mr. Aameir Alihussain completed his bachelor degree in Economics from McGill University, Canada and did his MBA from LUMS University in Pakistan. He joined the family business in 2001. He is Director of BSRM. Mr. Aameir Alihussain mainly involved in overall management of the company as well as policy making process.
Mrs. Tehseen Zohair Taherali, Director Mrs. Tehseen Zohair completed her graduation from university of Chittagong. She was born in 1970. She is actively involved in the management of the group. She is also involved in various charitable institutions and is a highly regarded personality in the society.
Mrs. Sabeen Aameir, Director Ms. Sabeen Aameir completed her MBA from LUMS University in Pakistan. She is involved mainly in the Human Resource Development activities of the Company. She was born in 1977. She also looks after the CSR (Corporate Social Responsibility) activities of the group.
CREDIT INFORMATION BUREAU (CIB) REPORT
Neither the company nor any of its directors or shareholders who holds 5% or more shares in the Paid in Capital of the issuer is loan defaulter in terms of the CIB report of Bangladesh Bank.
DESCRIPTION OF SENIOR EXECUTIVES AND DEPARTMENT HEADS
Sl. Date of Joining Experience Last five years Name Designation Qualification No in the company (Years) Experience 1 Mr. Tapan Sengupta Executive Director 06.02.1982 B. Com 31 BSRM BSRM 2 Mr. Kazi Anwar Ahmed Head of Corporate Affairs 01.03.1989 M.A (Honors ) (Economics) 32 Group CFO and Company BSRM 3 Mr. Shekhar Ranjan Kar, FCA 16.01.2002 M.Com (Acct.), FCA 22 Secretary Head of Marketing & New M.Sc, B.Sc (Mechanical BSRM 4 Mr.M Firoze product Developments 01.07.2004 Engineer) 32 United Steel Industrial 5 Mr. Mohinder Singh Hanspal Plant Head 05.10.2009 B. Sc. Engr. (Mech.) 15 Co., Kuwait & BSRM (05.10.2009 to till date) 6 Mr. Madani M. Imtiaz Hussain Plant Head 03.03.2007 B. Sc. Eng. 31 BSRM BSRM 7 Mr. Sankar Roy Group Head (T&D) 02.05.1993 B.Sc Engineer 21 Pacific Bangladesh Mr. Shobhan Mahbub Telecom Ltd.(01.02.03 to 8 National Sales Head 02.08.2009 MBA (Marketing) 17 Shahabuddin 01.04.08) BSRM (02.08.2009 to till date) Post graduate in Personnel BSRM 9 Mr. A. Gaffar Head of HR Operation 19.10.2006 30 Management M.Sc. in Metallurgical BSRM 10 Mr. Md. Nizamul Haque Head of production 06.09.2003 24 Engineer Lead Branding & Market BSRM 11 Mr. Md. Abul Hasnat 03.05.2007 MBA 23 Outreach 12 Mohammed Reazul Kabir, FCA Head (F &A) and CFO 02.06.2007 FCA 14 BSRM 13 Mr. Md. Habibullah CFO ( Finance ) 01.02.2005 B. Com 24 BSRM Mr. Md. Imtiaz Uddin BSRM 14 Head of Supply Chain 23.06.2008 MBA 11 Chowdhury 15 Mr. Md. Hasnatuzzaman Head of Maintenance 01.08.2004 B.Sc in Marine Engineering 16 BSRM Glaxosmith and BSRM 16 Mr. Abdur Rahim Head of Internal Audit 23.09.2012 MBA 33 (23.09.2012 to till date) Mr. Muhammad Ashiqur BSRM 17 Lead -Compliance & Accounts 02.02.2008 ACA 12 Rahman Denim Plus(Bangladesh) Ltd.(07.02.05 to 18 Mr. A.K.M. Saifuddin Khan Head of Admin 12.08.2009 MBA 15 07.08.09) BSRM (12.08.2009 to till date) KDS Group - Accessories 19 Mr. Tamim Wahid Al Helal Head of IT 12.12.2009 MBA in MIS 17 Division(15.09.01 to 10.12.09) & BSRM (12.12.2009 to till date)
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INVOLVEMENT OF OFFICERS AND DIRECTORS IN CERTAIN LEGAL PROCEEDINGS
No Director or Officer of the Company was involved in any of the following types of legal proceedings in the past ten years:
Any bankruptcy petition filed by or against any Company of which any officer or director of the issuer company filling the prospectus was a director, officer or partner at the time of the bankruptcy; Any conviction of any director or officer in criminal proceedings or any criminal proceedings pending against him; Any order, judgment or decree of any Court of competent jurisdiction against any director, officer permanently or temporarily enjoying, barring, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities. Any order of the Bangladesh Securities and Exchange Commission or other regulatory authority or foreign financial regulatory authority suspending or otherwise limiting the involvement of any director or officer in any type of business of securities or banking activities.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Neither proposed nor had any transaction during the last two years with the following related parties:
Any director or executive officer of the issuer Any director or officer Any person owning 5% or more of the outstanding shares of the issuer Any member of the immediate family (including spouse, parents, brothers, sisters, children, and in-laws) of any of the above persons Any transaction or arrangement entered into by the issuer or its subsidiary for a person who is currently a director or in any way connected with a director of either the issuer company or any of its subsidiaries/holding Company or associate concerns, or who was a director or connected in any way with a director at any time. Any loan either taken or given from or to any directors or any person connected with the directors, any loan taken from any such person who did not have any stake in the issuer, its holding company or its associate concerns except the transactions shown below:
Nature of Nature of Balance as on Balance as on Issuer status as Sl. No. Name of the Parties Relation Transactions 31-Dec-12 31-Dec-13 on 31 Dec 2013 1 H Akberali & Co. Ltd. Inter Short term loan 843,257,266 1,441,905,988 Dr. Company 2 Karnaphuli Engineering Works Ltd. -DO- Short term loan - 6,000,000 Cr. 3 Chittagong Power Company Ltd. -DO- Short term loan 266,333 20,295,654 Dr. 4 BSRM Wires Ltd. -DO- Short term loan (6,949,912) 12,811,318 Cr. 5 BSRM Recycling Industries Ltd. -DO- Short term loan 129,934,144 88,004,189 Dr. 6 Bangladesh Steels Ltd. -DO- Short term loan (4,498) 4,912,398 Cr. 7 BSRM Logistics Ltd. -DO- Short term loan 133,516,258 182,472,398 Dr. 8 BSRM Ispat Ltd. -DO- Short term loan 234,130,375 291,700,375 Dr. 9 BSRM Real Estates Ltd. -DO- Short term loan - 200,000 Dr. 10 BSRM Metals Ltd. -DO- Short term loan 341,082 988,918 Cr. 11 Section Steel Ind. Ltd -DO- Short term loan - 550,000 Cr. 12 East Bengal Trading & Industries -DO- Short term loan - 100,000 Dr. Corp. Ltd. 13 BSRM Steels Ltd. Investee Short term loan (362,970,206) 2,375,947,711 Cr. 14 BSRM Steel Mills Ltd. Investee Short term loan 68,027,565 252,410,775 Dr. 15 BSRM Steels Ltd. Investee Purchase (2,775,603,565) 3,563,424,229 Cr. 16 BSRM Wires Ltd. Inter Purchase (962,800) - - Company 17 Karnaphuli Engineering Works Ltd. Inter Sales 1,194,000 6,102 Dr. Company 18 BSRM Steel Mills Ltd. Investee Share Money deposit - 900,000,000 Dr.
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Directors Facilities
The Directors of BSRM does not enjoy any facilities except “Directors‟ Remuneration” which shown in the note – 30.01 of audited accounts on 31 December 2013 as disclosed below:
Sl. Year ended on 31 Year ended on Name of the Director Designation No. Dec 2013 (Tk) 31 Dec 2012 (Tk) 1 Mr. Alihussain Akberali MD & Director 7,200,000 7,200,000 2 Mr. Zohair Taherali Director 7,200,000 7,200,000 3 Mr. Aameir Alihussain Director 4,800,000 4,800,000 4 Mrs. Tehseen Zohair Taherali Director 4,800,000 4,800,000 5 Mrs. Sabeen Aameir Director 600,000 600,000 Total 24,600,000 24,600,000
In addition to remuneration, all directors avail company vehicles for transportation purposes.
EXECUTIVE COMPENSATION
Remuneration Paid to Top Five Salaried Officers
Jan 2013 to Jan 2012 to Sl. Location Name Designation Dec 2013 Dec 2012 No. (Tk./month) (Tk./month) 1 Mr. Mohindar Singh Hanspal Plant Head Chittagong 480,000 410,250 2 Mr. Tapan Sengupta Executive Director Chittagong 415,000 350,000 3 Mr. Shekhar Ranjan Kar, FCA Group CFO & CS Chittagong 375,000 305,000 4 Mr. Kazi Anwar Ahmed Head of corporate Dhaka 320,000 280,000 Affairs 5 Mr. Sankar Roy Group Head T&D Chittagong 290,000 250,000 Total 1,880,000 1,595,250
Aggregate Amount of Remuneration Paid to all Directors and Officers as Follows:
Salary, Allowance & Other Benefits Sl. No. Particulars Jan 2013 to Dec 2013 (Tk.) Jan 2012 to Dec 2012 (Tk.) 1 Directors 24,600,000 24,600,000 2 Officers & Staff 297,431,324 203,828,529
Remuneration Paid to Directors Who Was Not an Officer of the Company
Any Directors, who was not an officer of the company, were not taken remuneration for performing extra services for the company except the transaction shown under “Director Facilities”.
Future Compensation to Director or Officer
There is no contract with any director or officer for future compensation.
Company’s plan to Increase Substantially Remuneration to Officers & Directors during the Current year
The Company does not have any plan to substantially increase remuneration to Officers/Directors except usual increase in salaries & allowances and in line with the performance achieved by individuals.
OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES
The Company did not grant any options to any officers, directors or other employees of the Company or to any other person not involved with the company.
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TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM
A. The Directors and subscribers to the memorandum have not received any benefits directly or indirectly during the last five years except the following transactions:
Name Benefits Dec, 2013 Dec,2012 Dec,2011 Dec,2010 Dec,2009 Salary 7,200,000 7,200,000 7,200,000 3,600,000 2,400,000 Mr. Alihussain Dividend (cash) 32,950,695 - 11,453,138 - - Akberali Dividend (stock) - 7,635,425 - 9,959,250 - Ordinary Share (Merger) - 66,962,800 - - - Salary 7,200,000 7,200,000 7,200,000 3,600,000 1,680,000 Mr. Zohair Dividend (cash) 8,523,306 - 3,488,123 - - Taherali Dividend (stock) - 2,325,415 - 3,033,150 - Ordinary Share (Merger) - 65,184,530 - - - Salary 4,800,000 4,800,000 4,800,000 2,400,000 1,200,000 Mr. Aameir Dividend (cash) 25,604,933 - 10,913,627 - - Alihussain Dividend (stock) - 5,275,751 - 9,490,110
Ordinary Share (Merger) - 10,313,740 - - - Salary 4,800,000 4,800,000 4,800,000 2,400,000 1,056,000 Mrs. Tehseen Dividend (cash) 9,221,733 - 3,481,706 - - Zohair Dividend (stock) - 2,321,137 - 3,027,570 Taherali Ordinary Share (Merger) - 16,171,390 - - - Salary 600,000 600,000 600,000 600,000 10,000 Mrs. Sabeen Dividend (cash) 6,006,900 - 3450 - - Aameir Dividend (stock) - 2,002,300 - 3,000 -
In addition to the above, all directors avail company‟s vehicles for transportation purposes.
B. No assets were acquired or to be acquired from the directors and subscribers to the memorandum except the following allotments issued against assets:
Date of the allotments No. of shares Amount 30.05.1961 45,000 450,000 04.12.1962 70,850 708,500
TANGIBLE ASSETS PER SHARE (As per audited accounts) December 31, 2013 Particulars Taka Share capital 1,558,510,380 General reserve 30,170,818 Revaluation surplus 4,129,104,568 Retained earnings 2,398,521,265 Fair Value reserve 2,439,152 Net Assets 8,118,746,183 No of Ordinary Shares before IPO 155,851,038 Net Assets Value (NAV)per Share 52.09
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OWNERSHIP OF COMPANY’S SECURITIES
Shares held by Directors & Shareholders (Before IPO) (As per Schedule-X as on 28th June 2014) Sl. Number of Percentage Name of the Shareholders Addresses of Shareholders Position No. Shares (%) 1 Mr. Alihussain Akberali, FCA House No-4, Road No-3, Nasirabad Chairman & 21,967,130 14.095% Housing Society, Ctg, Bangladesh. Managing Director 2 Mr. Aameir Alihussain House No-4, Road No-3, Nasirabad Director 17,069,955 10.953% Housing Society, Ctg, Bangladesh. 3 Mr. Zohair Taherali C-4, Sanmar Park Avenue, Road-6, Director 5,682,204 3.646% Khulshi, PO:4225, Ctg, Bangladesh. 4 Mrs. Tehseen Zohair Taherali C-4, Sanmar Park Avenue, Road-6, Director 6,147,822 3.945% Khulshi, PO:4225, Ctg, Bangladesh. 5 Mrs. Sabeen Aameir House No-4, Road No-3, Nasirabad Director 4,004,600 2.570% Housing Society, Ctg, Bangladesh. 6 Mrs. Bilkis Alihussain House No-4, Road No-3, Nasirabad Shareholder 16,148,581 10.358% Housing Society, Ctg, Bangladesh. 7 Mr. Abdul Qadir Zohair C-4, Sanmar Park Avenue, Road-6, Shareholder 4,600 0.003% Khulshi, PO:4225, Ctg, Bangladesh. 8 Vortex Investments Ltd. Al Attar Tower, Level 29, Office Shareholder 3,645,890 2.339% 2906, P.O.Box 22832, Dubai U.A.E 9 Mr. Saifuddin Abbas Unwala Huzefa Al Abid Trading Co. Shareholder 8,399,000 5.389% P.O.Box 26075,Dubai,UAE. 10 Mr. Iqbal Hussain Time Enterprise, Naaz Chamber- Shareholder 10,870,000 6.975% 2nd Floor Room No. 43/44, Shasah E Liugul, Karachi, Pakistan. 11 Mr. Abbas Jumani Global Inpex Trading FZCO, Dubai, Shareholder 10,000,000 6.416% UAE. 12 Mr. Ali Asgar Badruddin 132, Atlee Avenue, MIN 4C8, Shareholder 20,000,000 12.833% Scarborough, Ontario, Canada. 13 H Akberali & Co. Ltd. Alli Mansion, Sadarghat Road, Shareholder 26,270,116 16.856% Chittagong. 14 Karnafully Engineering Works Alli Mansion, Sadarghat Road, Shareholder 4,000,850 2.567% Limited Chittagong. 15 Mrs. Munira Saifuddin P.O. Box 26075, Abu Dhabi, UAE Shareholder 13,880 0.009% 16 Mr. Md. Hussain Habib 27 Goldbrook Crescent, Richmond Shareholder 4,650 0.003% Hill, Ontario, L4S 1V4, Canada 17 Mr. Faisal Iqbal Poonawala Abdur Rahman Hamad Al Mifda Shareholder 4,520 0.003% Building, Abu Sagarah, Sharjah, UAE 18 Mrs. Shahnaz Hussain Shalimar Estates, A-102, Shahra-e- Shareholder 35,840 0.023% Iran, Clifton, Block-5, Karachi 19 Mrs Fatema Jangbarwala Room 4D 4/F, Hatton Place, 1A PO Shareholder 245,000 0.157% Shan Road, Mid-Levels, Hong Kong. 20 Mr. Yusuf Nosir Jangbarwala & Room 4D 4/F, Hatton Place, 1A PO Shareholder 900,000 0.577% Batul Alivhoy Tyebkhan Shan Road, Mid-Levels, Hong Kong. 21 Mrs. Rizwana Khandwala 81-A, Sayedna Nuruddin Road, Shareholder 101,000 0.065% Shabbirabad, Block-B, Karachi, Pakistan. 22 260 Employees of BSRM Ali Mansion, Sadarghat Road, Shareholder 335,400 0.218% group* Chittagong, Bangladesh. Total 155,851,038 100% *Name of employees of BSRM group has been presented in the “look –in on the sponsors‟ shares” section of this prospectus
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Shares held by Directors & Shareholders (After IPO) Sl. Number of Percentage Name of the Shareholders Addresses of Shareholders Position No. Shares (%) 1 Mr. Alihussain Akberali, FCA House No-4, Road No-3, Chairman & 21,967,130 12.672% Nasirabad Housing Society, Ctg, Managing Bangladesh. Director 2 Mr. Aameir Alihussain House No-4, Road No-3, Director 17,069,955 9.847% Nasirabad Housing Society, Ctg, Bangladesh. 3 Mr. Zohair Taherali C-4, Sanmar Park Avenue, Road- Director 5,682,204 3.278% 6, Khulshi, PO:4225, Ctg, Bangladesh. 4 Mrs. Tehseen Zohair Taherali C-4, Sanmar Park Avenue, Road- Director 6,147,822 3.546% 6, Khulshi, PO:4225, Ctg, Bangladesh. 5 Mrs. Sabeen Aameir House No-4, Road No-3, Director 4,004,600 2.310% Nasirabad Housing Society, Ctg, Bangladesh. 6 Mrs. Bilkis Alihussain House No-4, Road No-3, Shareholder 16,148,581 9.316% Nasirabad Housing Society, Ctg, Bangladesh. 7 Mr. Abdul Qadir Zohair C-4, Sanmar Park Avenue, Road- Shareholder 4,600 0.003% 6, Khulshi, PO:4225, Ctg, Bangladesh. 8 Vortex Investments Ltd. Al Attar Tower, Level 29, Office Shareholder 3,645,890 2.103% 2906, P.O.Box 22832, Dubai U.A.E 9 Mr. Saifuddin Abbas Unwala Huzefa Al Abid Trading Co. Shareholder 8,399,000 4.845% P.O.Box 26075,Dubai,UAE. 10 Mr. Iqbal Hussain Time Enterprise, Naaz Chamber- Shareholder 10,870,000 6.271% 2nd Floor Room No. 43/44, Shasah E Liugul, Karachi, Pakistan. 11 Mr. Abbas Jumani Global Inpex Trading FZCO, Shareholder 10,000,000 5.769% Dubai, UAE. 12 Mr. Ali Asgar Badruddin 132, Atlee Avenue, MIN 4C8, Shareholder 20,000,000 11.537% Scarborough, Ontario, Canada. 13 H Akberali & Co. Ltd. Alli Mansion, Sadarghat Road, Shareholder 26,270,116 15.154% Chittagong. 14 Karnafully Engineering Works Alli Mansion, Sadarghat Road, Shareholder 4,000,850 2.308% Limited Chittagong. 15 Mrs. Munira Saifuddin Abbas P.O. Box 26075, Abu Dhabi, UAE Shareholder 13,880 0.008% 16 Mr. Md. Hussain Habib 27 Goldbrook Crescent, Shareholder 4,650 0.003% Richmond Hill, Ontario, L4S 1V4, Canada 17 Mr. Faisal Iqbal Poonawala Abdur Rahman Hamad Al Mifda Shareholder 4,520 0.003% Building, Abu Sagarah, Sharjah, UAE 18 Mrs. Shahnaz Hussain Shalimar Estates, A-102, Shahra- Shareholder 35,840 0.021% e-Iran, Clifton, Block-5, Karachi 19 Mrs fatema Jangbarwala Room 4D 4/F, Hatton Place, 1A Shareholder 245,000 0.141% PO Shan Road, Mid-Levels, Hong Kong. 20 Mr. Yusuf Nosir Jangbarwala Room 4D 4/F, Hatton Place, 1A Shareholder 900,000 0.519% & Batul Alivhoy Tyebkhan PO Shan Road, Mid-Levels, Hong Kong. 21 Mrs. Rizwana Khandwala 81-A, Sayedna Nuruddin Road, Shareholder 101,000 0.058% Shabbirabad, Block-B, Karachi, Pakistan. 22 260 Employees of BSRM Ali Mansion, Sadarghat Road, Shareholder 335,400 0.193% group* Chittagong, Bangladesh. 23 General Shareholder N/A Shareholder 17,500,000 10.095% Total 173,351,038 100.00% *Name of employees of BSRM group has been presented in the “look –in on the sponsors‟ shares” section of this prospectus
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SHAREHOLDING STRUCTURE FOR 5% OR MORE
Number of Percentage Sl. Names Address of Shareholders Position Shares (%) House No-4, Road No-3, Chairman & Mr. Alihussain Akberali, 1 Nasirabad Housing Society, Ctg, Managing 21,967,130 14.095% FCA Bangladesh. Director House No-4, Road No-3, 2 Mr. Aameir Alihussain Nasirabad Housing Society, Ctg, Director 17,069,955 10.953% Bangladesh. House No-4, Road No-3, 3 Mrs. Bilkis Alihussain Nasirabad Housing Society, Ctg, Shareholder 16,148,581 10.358% Bangladesh. Mr. Saifuddin Abbas Huzefa Al Abid Trading Co. 4 Shareholder 8,399,000 5.389% Unwala P.O.Box 26075,Dubai,UAE. Time Enterprise, Naaz Chamber- 2nd Floor Room No. 43/44, 5 Mr. Iqbal Hussain Shareholder 10,870,000 6.97% Shasah E Liugul, Karachi, Pakistan. Global Inpex Trading FZCO, 6 Mr. Abbas Jumani Shareholder 10,000,000 6.42% Dubai, UAE. 132, Atlee Avenue, MIN 4C8, 7 Mr. Ali Asgar Badruddin Shareholder 2,000,0000 12.83% Scarborough, Ontario, Canada. Alli Mansion, Sadarghat Road, 8 H Akberali & Co. Ltd. Shareholder 26,270,116 16.86% Chittagong.
SHAREHOLDING STRUCTURE AFTER IPO FOR THE DIRECTOR
Sl. Number of Percentage Name of the Shareholders Addresses of Shareholders Position No. Shares (%) Chairman & House No-4, Road No-3, Nasirabad 1 Mr. Alihussain Akberali, FCA Managing 21,967,130 12.672% Housing Society, Ctg, Bangladesh. Director House No-4, Road No-3, Nasirabad 2 Mr. Aameir Alihussain Director 17,069,955 9.847% Housing Society, Ctg, Bangladesh. C-4, Sanmar Park Avenue, Road-6, 3 Mr. Zohair Taherali Director 5,682,204 3.278% Khulshi, PO:4225, Ctg, Bangladesh. C-4, Sanmar Park Avenue, Road-6, 4 Mrs. Tehseen Zohair Taherali Director 6,147,822 3.546% Khulshi, PO:4225, Ctg, Bangladesh. House No-4, Road No-3, Nasirabad 5 Mrs. Sabeen Aameir Director 4,004,600 2.310% Housing Society, Ctg, Bangladesh.
SECURITIES OWNED BY THE OFFICERS
No share or security is held by any officer of the company except as disclosed below:
Number of Percentage Sl.No. Names Position Shares (%) 1 Shekhar Ranjan Kar, FCA Group CFO & Company Secretary 10,000 0.006% 2 Tapan Sengupta Executive Director 10,000 0.006% 3 Kazi Anwar Ahmed Head of Corporate Affairs 10,000 0.006% 4 Madani M. Imtiaz Hossain Plant Head 10,000 0.006% 5 Md. Abul Hasnat Lead Branding & Market Outreach 2,500 0.002% 6 Md. Hasnatuzzaman Head Maintenance 9,900 0.006% 7 Sankor Roy Group Head - T & D 7,500 0.005% 8 Mohammed Reazul Kabir, FCA Head of Finance & Accounts and 1,000 0.001% Chief Financial Officer 9 Others Officers & Employee of BSRM 274,500 0.179%
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SECTION IX
FEATURES OF INITIAL PUBLIC OFFERING (IPO)
DETERMINATION OF OFFERING PRICE
Valuation Method Price per Share Method 1: Weighted Average Earning Based Value 65.85 Method 2: a) Net Asset Value with Revaluation 52.09 b) Net Asset Value without Revaluation 25.58
The offer price of the shares of BSRM has been fixed at Tk. 35/- per share including premium Tk. 25/- against face value of Tk. 10/-. Justification for the offering price is as follows:
Workings of Prices
Method 1: Weighted Average Earning Based Value (5 years)
Weighted no Year No. of Shares NPAT Weighted NPAT of share Dec-13 155,851,038 788,701,611 34.8549% 274,901,021 Dec-12 155,851,038 453,924,187 34.8549% 158,214,743 Dec-11 64,345,491 1,150,797,919 14.3904% 165,604,111 Dec-10 58,970,040 261,194,680 13.1882% 34,446,863 Dec-09 12,125,020 83,661,610 2.7117% 2,268,624 447,142,627 2,738,280,007 100.00% 635,435,362
No. of Outstanding Shares before IPO 155,851,038 WEPS 4.077 PE Multiplier* 16.15 Earning based Value 65.85
Method 2: Net Asset Value As on 31 December As on 31 December 2013 2013 (with Revaluation) (without Revaluation) Share Capital 1,558,510,380 1,558,510,380 General reserve 30,170,818 30,170,818 Revaluation Surplus 4,129,104,568 0 Retained Earnings 2,398,521,265 2,398,521,265 Fair Value reserve 2,439,152 0 Net Assets 8,118,746,183 3,987,202,463 No. of Outstanding Share before IPO 155,851,038 155,851,038 NAV per Share 52.09 25.58
*Calculation of relevant P/E multiple:
Month Market P/E Industry P/E March , 2014 15.89 22.98 April, 2014 16.41 20.96 May, 2014 15.96 21.01 Average 16.15 21.97 Relevant P/E Multiple (lower of three months average P/E of Market and Engineering sector) 16.15 Source: DSE Monthly Review
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MARKET FOR THE SECURITIES BEING OFFERED
The issuer shall apply to the following two Stock Exchanges within 7 (seven) working days from the date of consent accorded by the BSEC to issue the prospectus. The issuer will apply at:
Dhaka Stock Exchange Limited 9/F, Motijheel C/A, Dhaka-1000
And
Chittagong Stock Exchange Limited CSE Buildng, 1080 Sk. Mujib Road Agrabad, Chittagong-4100
DECLARATION ABOUT LISTING OF SHARES WITH THE STOCK EXCHANGE(S)
None of the stock exchanges(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) days, as the case may be.
In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the issuer company, shall be collectively as well as separately liable for refund of the subscription money, with interest at the rate of 2% (two percent) per month above the bank rate, to the subscribers concerned.
The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time allowed for refund of the subscription money.
TRADING AND SETTLEMENT
Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the shares of the Company.
DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED
Dividend, Voting, Pre-emption Rights
The Share Capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All shareholders shall have the usual voting rights in person or by proxy in connection with, among others, election of Directors & Auditors and other usual agenda of General Meeting – Ordinary or Extra-ordinary. On a show of hand, every shareholder present in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present or by proxy shall have one vote for every share held by him or her.
In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of shares in terms of the guidelines issued by the BSEC from time to time.
Conversion and Liquidation Rights
In terms of provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind. Page | 59
Dividend Policy
(a) The profit of the Company, subject to any special right relating thereto created or authorized to be created by the Memorandum and subject to the provisions of the Articles of Association, shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively. (b) No large dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of Net profit of the Company shall be conclusive. (c) No dividend shall be payable except out of the profits of the Company or any other undistributed profits. Dividend shall not carry interest as against the Company. (d) The Directors may from time to time pay the members such interim dividend as in their judgment the financial position of the Company may justify. (e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer. (f) No limitation in payment of dividend is stipulated in any debt instrument or otherwise.
Other Rights of Stockholders
In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind.
The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the right to receive all periodical statement and reports, audited as well as un audited, published by the company from time to time.
The shareholder holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition extra ordinary General Meeting of the company as provided for the section 84 of the Companies Act 1994.
DEBT SECURITIES
BSEC approved raising of capital by Bangladesh Steel Re-Rolling Mills Limited through issuance of 20,000 convertible (12%) secured coupon bond of BDT 100,000 each totaling to BDT 2,000 million to institutional investors through consent letter no. SEC/CI/Ds-01/2013/34 dated January 9, 2014. Consent for issue of bond shall remain valid for one year (01) from the date of consent. Main purposes of the bonds were for equity investment in BSRM Steel Mills Limited (an associate of BSRM Limited) by 1322.5 million and remaining was for retirement of expensive loan.
Subscription procedure for Tk. 1,500 million of bonds with different Bank and Financial Institutions has been completed on 27 April, 2014 and commitment for Tk. 500 million of bonds is taken from Eastern Bank Limited, which will be subscribed within short period of time. Failing to subscribe by January 8 2015 the facility will stand cancelled. 12% of the subscribed bond worth BDT 152.4 (except for SABINCO) million will be converted into ordinary shares of Bangladesh Steel Re-Rolling Mills Limited within 30 days after the end of the first year. Details of subscription are as follows:
Sl. Name of Subscriber Subscribed Amount in BDT No of Bond Issued 1 Bank Asia Limited 100,000,000 1000 2 Farmers' Bank Limited 200,000,000 2000 3 Midland Bank Ltd. 200,000,000 2000 4 NRB Commercial Bank Limited 500,000,000 5000 5 SABINCO 230,000,000 2300 6 Standard Bank Limited 150,000,000 1500 7 Bangladesh Commerce Bank Limited 120,000,000 1200 Total 1,500,000,000 15000
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Basic Features of the Bond
Issue Size : BDT 2000.0 Million
Purpose : i)Onward equity investment of BDT 1322.5 million in BSRM Steel Mills Limited (an associaites of Bangladesh Steel Re-Rolling Mills Lltd) – a billet manufacturing facility which will have a capacity of 862,000 MT per annum to function as strong backward linkage to the group‟s long iron segment.
ii) Retirement of expensive loan worth BDT 677.5 million .
Instrument : 12% convertible, secured, 13% coupon bond worth BDT 2.0 Billion
Maturity Period : 5 years
Coupon : 13.00% p.a.
Coupon Period : Coupons will be paid quarterly.
Repayment will commence from 2nd Year and 88% of the total issue amounting to Redemption : BDT 1,760 million will be redeemed over 4 years in equal installments except the 100% of SABINCO portion (BDT 27.6 million) will be redeemed in cash.
12% of the bond worth BDT 212.4 million will be converted into ordinary shares of Bangladesh Steel Re-Rolling Mills Limited within 30 days after the end of the first Convertibility : year except for SABINCO (12 % of BDT 230 Million). The shares will become saleable for the investors after the lock-in period of 12 months from the conversion.
The conversion will take place at BDT 38.00 per share with face value of BDT 10.00 Conversion Price : per share. Fractional amount of shares will be paid in cash at the aforementioned price.
Trustee : Eastern Bank Limited
Subscribers : Bank and Non Banking Financial Institution
The Issuer shall ensure that funds are available to investors through the Paying Payment Method : Agent, i.e. Eastern Bank Limited.
Sponsors and/or parent company of Bangladesh Steel Re-Rolling Mills Limited (BSRML) will provide a buy back guarantee to investors at Taka 57.00 per share (150% of conversion price) at the beginning of 3rd year. In case, market price of shares fall below Taka 57.00 when shares become saleable, investors will be given an option to sell their converted shares at Taka 57.00. Thirty (30) Buy Back days before the lock-in ends, investors will be asked to communicate their : Guarantee intention in writing whether they would exercise the option or not. In case of lack of response from any investor, buy back will be the default option.
This is the most attractive feature of this issue as this guaranteed capital gain is being provided by the sponsors / parent company with a successful track record of more than 60 years and a trustworthy brand image.
Minimum Net For Institutional Investors (Banks/FIs/ Insurance Companies: 8.54% Internal Rate of : Individual Investors: 12.61% Return (IRR)
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Minimum Gross For Institutional Investors (Banks/FIs/ Insurance Companies: 14.85% : IRR Individual Investors: 14.01%
Conversion will be implemented within 30 days after the end of the first year with one year lock in period for converted shares. To ensure a guaranteed capital gain, sponsors of BSRML will provide buy back guarantee for the converted shares at a price (BDT 57/- per share). The converted shares can be sold in the open market or will be bought back by the issuers at predetermined price (BDT 57/- per share) whichever investors Key points in the opt for. : Structure During the one year lock in period, investors will be entitled to dividend or bonus shares if the company declares. However, dividends or bonus shares (if any) will be adjusted with the premium offered for the buyback (if investor exercises buy back option). There will be a reference date for notifying the issuer about investor‟s intention to exercise the buyback option. Probably, the date will be 30 days before the lock-in ends.
Securities shall include (but will not be limited to) the following: Lien on sponsor shares of BSRM Steels Limited up to 110% of the issue. As this security will be kept at market price, security evaluation will be done on semi-annual basis and trustee shall call further security if required. Trustee will Security : release portion of shares equivalent to principal repayment from time to time. Personal guarantees of all sponsors Corporate guarantee from H. Akberali& Co. Ltd – the parent company of BSRML and from BSRM Steel Mills Limited.
The facility documentation shall contain specific provisions for the transferability of Transferability : commitments and participations concerning the investors with the consent of the issuer.
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SECTION X
ALLOTMENT, SUBSCRIPTION & MARKET
LOCK-IN ON SPONSORS’ SHARES
All issued shares of the issuer at the time of according consent to public offering shall be subject to a lock-in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later.
Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares of the company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year from the date of issuance of prospectus or commercial operation, whichever comes later.
The following table indicates the lock in status of the shareholders of Bangladesh Steel Re-Rolling Mills Limited:
Date of Lock in Period Sl No. of % of shares Acquisition from the date Name of Share Holder Status No Shares hold of prospedtus issuance 1 Mr. Alihussain Akberali, FCA Chairman & 3 years 21,967,130 14.095% 7-Oct-80 Managing Director 2 Mr. Aameir Alihussain Director 17,069,955 10.953% 12-Mar-02 3 years 3 Mr. Zohair Taherali Director 5,682,204 3.645% 19-Sep-88 3 years 4 Mrs. Tehseen Zohair Taherali Director 6,147,822 3.945% 1-Feb-99 3 years 5 Mrs. Sabeen Aameir Director 4,004,600 2.570% 3-Nov-09 3 years 6 Mrs. Bilkis Alihussain Shareholder 16,148,581 10.358% 1-Dec-09 3 years 7 Mr. Abdul Qadir Zohair Shareholder 4,600 0.003% 12-Apr-10 3 years 8 Vortex Investments Ltd. Shareholder 3,645,890 2.339% 20-Jun-10 3 years 9 Mr. Saifuddin Abbas Unwala Shareholder 8,399,000 5.389% 20-Jun-10 3 years 10 Mr. Iqbal Hussain Shareholder 10,870,000 6.975% 20-Jun-10 3 years 11 Mr. Abbas Jumani Shareholder 10,000,000 6.416% 21-Sep-10 3 years 12 Mr. Ali Asgar Badruddin Shareholder 20,000,000 12.833% 21-Sep-10 3 years 13 H Akberali & Co. Ltd. Shareholder 26,270,116 16.856% 3-Apr-01 3 years 14 Karnafully Engineering Works Shareholder 3 years 4,000,850 2.567% 30-Sep-12 Limited 15 Mrs. Munira Saifuddin Shareholder 13,880 0.009% 25-Jun-12 3 years 16 Mr. Md. Hussain Habib Shareholder 4,650 0.003% 25-Jun-12 3 years 17 Mr. Faisal Iqbal Poonawala Shareholder 4,520 0.003% 25-Jun-12 3 years 18 Mrs. Shahnaz Hussain Shareholder 35,840 0.023% 25-Jun-12 3 years 19 Mrs fatema Jangbarwala Shareholder 245,000 0.157% 8-Jun-13 3 years Mr. Yusuf Nosir Jangbarwala & 20 Shareholder 900,000 0.577% 8-Jun-13 3 years Batul Alivhoy Tyebkhan 21 Mrs. Rizwana Khandwala Shareholder 101,000 0.065% 8-Jun-13 3 years 22 260 Employees of BSRM group Shareholder 335,400 0.218% 26-Jun-12 3 years ** Total 155,851,038 100.00%
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**Details about Employees shareholding status are as follows:
Lock in Period Sl. Name of the Employee No. of % of shares Date of from the date of Designation No Shareholders Shares hold Acquisition prospedtus issuance 1 A. M. Arifuzzaman Chowdhury Assistant Manager - Store 1,000 0.00% 26-Jun-12 3 years 2 Abdul Barek Security Guard 600 0.00% 26-Jun-12 3 years 3 Abdul Mannan Gazi Junior Electrician 500 0.00% 26-Jun-12 3 years 4 Abdul Motaleb Foreman 1,000 0.00% 26-Jun-12 3 years 5 Abdul Wahab Security Inspector 500 0.00% 26-Jun-12 3 years 6 Abdullah Al-Arman Lead IT Support & Hardware 1,500 0.00% 26-Jun-12 3 years 7 Abdur Rahim Crane Operator 700 0.00% 26-Jun-12 3 years 8 Abdur Rahman Security Guard 600 0.00% 26-Jun-12 3 years 9 Abdur Rashid Security Guard 500 0.00% 26-Jun-12 3 years 10 Abhishek Saha Assistant B2C Sales Officer 600 0.00% 26-Jun-12 3 years 11 Abu Nayim Md. Aman Ullah Senior Payable Officer 2,000 0.00% 26-Jun-12 3 years (BISCO) 12 Abu Saleh Junior Technician. 500 0.00% 26-Jun-12 3 years 13 Abu Sayeed Technician 500 0.00% 26-Jun-12 3 years 14 Abul Hashem Junior Technician. 500 0.00% 26-Jun-12 3 years 15 Abul Hashem Assistant Foreman 600 0.00% 26-Jun-12 3 years 16 Abul Hashem Technician 700 0.00% 26-Jun-12 3 years 17 Abul Kalam Senior Technician 1,500 0.00% 26-Jun-12 3 years 18 Ahmed Hossain Junior Officer 800 0.00% 26-Jun-12 3 years 19 Ahmed Kabir Crane Operator 900 0.00% 26-Jun-12 3 years 20 Ahmed Kibria Regal Junior Officer 500 0.00% 26-Jun-12 3 years 21 Ajit Kumar Saha Clerk 1,200 0.00% 26-Jun-12 3 years 22 Akter Hossain Junior Technician. 500 0.00% 26-Jun-12 3 years 23 Al Amin Hossain Electrician 500 0.00% 26-Jun-12 3 years 24 Alamgir Bin Zaman Chowdhury Lead Sales Support 1,500 0.00% 26-Jun-12 3 years Assistant Officer - Cash & 26-Jun-12 3 years 25 Amit Rudra 500 0.00% Accounts 26 Ananta Das Security Guard 500 0.00% 26-Jun-12 3 years 27 Anisur Rahman Junior Technician. 500 0.00% 26-Jun-12 3 years 28 Anwar Hossain Junior Officer - Commercial 1,000 0.00% 26-Jun-12 3 years 29 Apru Mong Marma Security Guard 500 0.00% 26-Jun-12 3 years 30 Aziz Hatim Bhai Officer - Accounts 500 0.00% 26-Jun-12 3 years Assistant Manager - B2C 26-Jun-12 3 years 31 Babul Chandra Datta 500 0.00% Sales 32 Bikash Das Painter 700 0.00% 26-Jun-12 3 years 33 Biplob Talukdar Store Keeper 600 0.00% 26-Jun-12 3 years Junior Technician - 26-Jun-12 3 years 34 Biswajat Barua 500 0.00% Production Module Lead - Project 26-Jun-12 3 years 35 Champak Barua 500 0.00% Implementation 36 Choton Barua Senior Technician. 500 0.00% 26-Jun-12 3 years 37 Dayal Rudra Peon 500 0.00% 26-Jun-12 3 years 38 Delwar Hossain Senior Technician 1,000 0.00% 26-Jun-12 3 years 39 Didarul Alam Bhuiyan Junior Project Support Officer 500 0.00% 26-Jun-12 3 years 40 Dipak Chandra Datta In-Charge Region 2,500 0.00% 26-Jun-12 3 years 41 Elfhet Barua Technician 700 0.00% 26-Jun-12 3 years 42 Enamul Haque Junior Technician. 500 0.00% 26-Jun-12 3 years 43 Fazal Amin chowdhury Store Keeper 700 0.00% 26-Jun-12 3 years 44 Feroj Mahmud Bin Gias B2C Sales Officer 500 0.00% 26-Jun-12 3 years 45 Forkan Uddin Technician 600 0.00% 26-Jun-12 3 years 46 Giash Uddin Senior Store Keeper 700 0.00% 26-Jun-12 3 years 47 Hafaz Ahmed Crane Operator 500 0.00% 26-Jun-12 3 years 48 Harun Rashid Accounts Assistant 600 0.00% 26-Jun-12 3 years 49 Hasan Zafar Chowdhury Executive Director 2,000 0.00% 26-Jun-12 3 years Senior Officer - Projects 26-Jun-12 3 years 50 Hatim Hakimuddin 1,200 0.00% Coordination Officer - Customer Service & 26-Jun-12 3 years 51 Humayun Kabir 500 0.00% Delivery 52 Indrajit Chowdhury Assistant Officer - CSD 1,000 0.00% 26-Jun-12 3 years Page | 64
53 Jahangir Farazi Senior Technician. 700 0.00% 26-Jun-12 3 years 54 Jahed Hossain Junior Technician. 500 0.00% 26-Jun-12 3 years 55 Jewel Barua Junior Technician. 500 0.00% 26-Jun-12 3 years 56 Jishutosh Talukder Senior Local Purchase Officer 1,600 0.00% 26-Jun-12 3 years 57 Joarder Wahidul Islam Deputy Manager - B2C Sales 1,700 0.00% 26-Jun-12 3 years 58 Joymoon Chowdhury Senior Officer - Store 600 0.00% 26-Jun-12 3 years 59 Kalyan Bhattacharjee In-Charge Production 7,000 0.00% 26-Jun-12 3 years 60 Kamal Uddin Junior Technician. 500 0.00% 26-Jun-12 3 years 61 Kawsar Alam Security Guard 500 0.00% 26-Jun-12 3 years In-Charge Credit Control 26-Jun-12 3 years 62 Kazi A. T. M. Talimur Rashid 900 0.00% (Steels) 63 Kazi Abdul Mannan Assistant Store Keeper 500 0.00% 26-Jun-12 3 years 64 Kazi Anwar Ahmed Head of Corporate Affairs 10,000 0.01% 26-Jun-12 3 years Assistant Officer - 26-Jun-12 3 years 65 Khorshed Alam 500 0.00% Commercial 66 Kishore Gomes Senior Technician. 1,300 0.00% 26-Jun-12 3 years 67 Kishore Kumar Nath Assistant Officer - VAT 600 0.00% 26-Jun-12 3 years 68 Krishanu Barua Store Officer 500 0.00% 26-Jun-12 3 years 69 Lokman Hossain Security Guard 600 0.00% 26-Jun-12 3 years 70 Lutfur Rahman Junior Technician. 500 0.00% 26-Jun-12 3 years 71 M. Harunur Rashid Lead ERP Project 500 0.00% 26-Jun-12 3 years 72 Madani M. Imtiaz Hossain Plant Head 10,000 0.01% 26-Jun-12 3 years 73 Mahamuduzzaman Murad Engineer - Electrical 2,000 0.00% 26-Jun-12 3 years 74 Md. Abdul Matin Mondol Supervisor - CSD 500 0.00% 26-Jun-12 3 years 75 Md. Abdul Momin Senior Officer - Store 500 0.00% 26-Jun-12 3 years 76 Md. Abdur Razzak Senior Accounts Officer 2,500 0.00% 26-Jun-12 3 years 77 Md. Abdus Salam Driver 500 0.00% 26-Jun-12 3 years 78 Md. Abil As Aman B2C Sales Officer 500 0.00% 26-Jun-12 3 years In-Charge Mechanical 26-Jun-12 3 years 79 Md. Abu Sohel 500 0.00% Maintenance Lead Branding & Market 26-Jun-12 3 years 80 Md. Abul Hasnat 2,500 0.00% Outreach Assistant Engineer - 26-Jun-12 3 years 81 Md. Abul Hasnat 1,100 0.00% Mechanical 82 Md. Abul Khair Sub-Assistant Engineer 600 0.00% 26-Jun-12 3 years 83 Md. Aktaruzzaman Security Guard 500 0.00% 26-Jun-12 3 years 84 Md. Alamgir Hossain Junior Officer - Store 500 0.00% 26-Jun-12 3 years 85 Md. Aminul Islam Security Guard 500 0.00% 26-Jun-12 3 years Junior Technician - Crane 26-Jun-12 3 years 86 Md. Anwar Hossain 500 0.00% Operation 87 Md. Belal Hossain Security Guard 500 0.00% 26-Jun-12 3 years 88 Md. Belal Uddin Assistant Chemist 600 0.00% 26-Jun-12 3 years 89 Md. Benjeer Ahmed Security Inspector 500 0.00% 26-Jun-12 3 years 90 Md. Bulbul Rahman Junior Technician. 500 0.00% 26-Jun-12 3 years 91 Md. Delowar Hossain Molla In-Charge HR, IR & Admin 500 0.00% 26-Jun-12 3 years Software Systems & 26-Jun-12 3 years 92 Md. Delwar Hossain 2,400 0.00% Applications Developer 93 Md. Delwar Hossen Assistant In-Charge CSD 2,000 0.00% 26-Jun-12 3 years 94 Md. Faruk Hossain B2B Sales Officer 900 0.00% 26-Jun-12 3 years 95 Md. Habibur Rahman In-Charge Admin & Facilities 3,600 0.00% 26-Jun-12 3 years 96 Md. Hasim Uddin Talukder Security Officer 500 0.00% 26-Jun-12 3 years 97 Md. Hasnatuzzaman Head Maintenance 9,900 0.01% 26-Jun-12 3 years 98 Md. Ibrahim Messenger 500 0.00% 26-Jun-12 3 years 99 Md. Ieahia Technician 500 0.00% 26-Jun-12 3 years 100 Md. Imran Shakha Lead Project Control 2,100 0.00% 26-Jun-12 3 years 101 Md. Jabed Junior Technician 500 0.00% 26-Jun-12 3 years 102 Md. Jahangir Hossain In-Charge CSD & VAT 6,500 0.00% 26-Jun-12 3 years 103 Md. Kabir Khan Technician - Motor Winding 500 0.00% 26-Jun-12 3 years 104 Md. Kawsar Ali Senior B2B Sales Officer 1,000 0.00% 26-Jun-12 3 years 105 Md. Khorshed Alam Electrician 500 0.00% 26-Jun-12 3 years 106 Md. Mahbubul Alam Chowdhury Lead IR 4,500 0.00% 26-Jun-12 3 years 107 Md. Mahmud Hasan B2B Sales Officer 700 0.00% 26-Jun-12 3 years Software Systems & 26-Jun-12 3 years 108 Md. Mainul Hussain Khan 500 0.00% Applications Developer
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Head Support Functions & 26-Jun-12 3 years 109 Md. Miftahul Huda Sharifee 3,500 0.00% SHE 110 Md. Mohiuddin Bablu Junior Electrician 500 0.00% 26-Jun-12 3 years 111 Md. Morshed Peon 800 0.00% 26-Jun-12 3 years 112 Md. Mostafizur Rahman In-Charge Region 1,700 0.00% 26-Jun-12 3 years 113 Md. Nasir Senior Technician 1,100 0.00% 26-Jun-12 3 years 114 Md. Nurul Amin Sheikh Security Guard 500 0.00% 26-Jun-12 3 years Senior Facilities Manitenance 26-Jun-12 3 years 115 Md. Nurunnabi Talukder 1,000 0.00% Officer Assistant Manager - 26-Jun-12 3 years 116 Md. Obidul Haque 1,500 0.00% Commercial & Purchase Technician - Furnace ( Below 26-Jun-12 3 years 117 Md. Rezaul Karim 500 0.00% Platform) 118 Md. Ridwanul Moula Office Assistant 500 0.00% 26-Jun-12 3 years 119 Md. Salim Assistant Foreman 1,100 0.00% 26-Jun-12 3 years 120 Md. Shafikul Alam Technacian Mould Operation 500 0.00% 26-Jun-12 3 years 121 Md. Shah Alam Sumon Electrician 500 0.00% 26-Jun-12 3 years 122 Md. Shaha Ali Manager - Stores & Inventory 500 0.00% 26-Jun-12 3 years 123 Md. Shahid Ullah Technician Grade 01 500 0.00% 26-Jun-12 3 years Technician - Laddle 26-Jun-12 3 years 124 Md. Shahinur Rahman 500 0.00% Prepartion 125 Md. Shahjahan Electrician 500 0.00% 26-Jun-12 3 years 126 Sumon Chakraborty Store Helper 500 0.00% 26-Jun-12 3 years 127 Md. Yasin Security Guard 700 0.00% 26-Jun-12 3 years 128 Md. Yeachin Junior Technician. 500 0.00% 26-Jun-12 3 years 129 Md. Zahiduzzaman Head - BSRM Recycling 3,500 0.00% 26-Jun-12 3 years 130 MD. Zahir Uddin Team Lead 500 0.00% 26-Jun-12 3 years 131 Md. Zakir Hossain Junior Technician. 500 0.00% 26-Jun-12 3 years 132 Md. Ziaul Ahsan Sales Engineer 1,000 0.00% 26-Jun-12 3 years 133 Md. Zunaid Hossain B2B Sales Officer 1,000 0.00% 26-Jun-12 3 years 134 Meraj Uddin Senior Technician. 800 0.00% 26-Jun-12 3 years 135 Mintu Kanti Bhattacharjee Head Maintenance 3,300 0.00% 26-Jun-12 3 years 136 Mir Khaledur Rashid Technician 500 0.00% 26-Jun-12 3 years 137 Mizanur Rahman Process Audit Officer 500 0.00% 26-Jun-12 3 years Junior Technician - 26-Jun-12 3 years 138 Mizanur Rahman 500 0.00% Production 139 Mohammad Abul Boshor Junior Store Officer 500 0.00% 26-Jun-12 3 years 140 Mohammad Abul Hashem Assistant Officer - VAT 500 0.00% 26-Jun-12 3 years 141 Mohammad Foysal Junior Technician. 500 0.00% 26-Jun-12 3 years 142 Mohammad Iftekhar Hossain Utilities Officer 500 0.00% 26-Jun-12 3 years 143 Mohammad Jahangir Hossain Officer - Machine Shop 3,000 0.00% 26-Jun-12 3 years 144 Mohammad Karim Assistant Officer - Accounts 500 0.00% 26-Jun-12 3 years 145 Mohammad Moin Uddin Lead Facilities 500 0.00% 26-Jun-12 3 years Mohammad Najim Uddin 26-Jun-12 3 years 146 Assistant Manager - Accounts 2,500 0.00% Chowdhury Technician - Laddle 26-Jun-12 3 years 147 Mohammad Rafiqul Islam 500 0.00% Prepartion 148 Mohammad Sayeedul Karim Group Chief of Security 3,300 0.00% 26-Jun-12 3 years 149 Mohammed Ali Security Guard 500 0.00% 26-Jun-12 3 years 150 Mohammed Rabiul Karim Junior Officer - Store 500 0.00% 26-Jun-12 3 years 151 Mohammed Reazul Kabir Head of Finance & Accounts 1,000 0.00% 26-Jun-12 3 years Mohammed Tamim Wahid Al- 26-Jun-12 3 years 152 Head of IT 2,500 0.00% Helal 153 Mohammed Younus Senior Officer - Production 3,600 0.00% 26-Jun-12 3 years 154 Moize Hussain Adviser 500 0.00% 26-Jun-12 3 years 155 Mojibur Rahman Technician 500 0.00% 26-Jun-12 3 years 156 Mojibur Rahman Peon 500 0.00% 26-Jun-12 3 years 157 Momenul Hoque Peon 500 0.00% 26-Jun-12 3 years 158 Mridul Chandra Nath Security Guard 500 0.00% 26-Jun-12 3 years 159 Mridul Kanti Das Security Guard 500 0.00% 26-Jun-12 3 years 160 Mubarak Hossain Driver 500 0.00% 26-Jun-12 3 years 161 Muhammad Monowar Hossain B2C Sales Officer 500 0.00% 26-Jun-12 3 years Senior Project - Investment 26-Jun-12 3 years 162 Murtaza Hussain 1,600 0.00% Officer Page | 66
163 Naren Dey Driver 700 0.00% 26-Jun-12 3 years 164 Nazrul Islam Foreman 800 0.00% 26-Jun-12 3 years 165 Nepal Chakraborty Computer Operator 1,000 0.00% 26-Jun-12 3 years 166 Nibir Chakraborty Assistant Melter 1,500 0.00% 26-Jun-12 3 years 167 Nikhil Ranjan Das Plant Head 2,000 0.00% 26-Jun-12 3 years 168 Nur Alam Security Guard 500 0.00% 26-Jun-12 3 years 169 Nurul Karim Technician 500 0.00% 26-Jun-12 3 years 170 Pannu Meah Senior Technician. 500 0.00% 26-Jun-12 3 years 171 Prabir Chowdhury Senior Store Keeper 700 0.00% 26-Jun-12 3 years 172 Pradip Kanti Nandy Security Guard 600 0.00% 26-Jun-12 3 years In-Charge Mechanical 26-Jun-12 3 years 173 Priyatosh Kanti Talukder 3,500 0.00% Maintenance 174 Prodip Kumar Nath Security Guard 500 0.00% 26-Jun-12 3 years 175 Pujan Dhar In-Charge Estates 5,800 0.00% 26-Jun-12 3 years 176 Md. Rafique Senior Technician. 700 0.00% 26-Jun-12 3 years 177 Rafiqul Islam Foreman 2,100 0.00% 26-Jun-12 3 years 178 Rajdeb Das Assistant Utilities Officer 500 0.00% 26-Jun-12 3 years 179 Rakit Marma Driver 600 0.00% 26-Jun-12 3 years 180 Ranjit Biswas Senior Technician 800 0.00% 26-Jun-12 3 years Receiptionist Cum Telephone 26-Jun-12 3 years 181 Ratna Rani Deb 800 0.00% Operator 182 Rezaul Karim Babul Filter 700 0.00% 26-Jun-12 3 years 183 Ruhul Amin Crane Operator 800 0.00% 26-Jun-12 3 years In-Charge Electrical 26-Jun-12 3 years 184 Ruhul Amin Bhuiyan 3,000 0.00% Maintenance 185 S. M. Gulam Mustafa Senior Supervisor 1,800 0.00% 26-Jun-12 3 years 186 Safar Ali Junior Technician. 500 0.00% 26-Jun-12 3 years 187 Saiful Islam B2C Sales Officer 500 0.00% 26-Jun-12 3 years 188 Samar Barua Electrician 500 0.00% 26-Jun-12 3 years 189 Samir Kanti Dey Technician 900 0.00% 26-Jun-12 3 years 190 Sanjira Khanam Reception Officer 600 0.00% 26-Jun-12 3 years 191 Sanjit Chandra Bhowmik Junior B2B Sales Officer 500 0.00% 26-Jun-12 3 years 192 Sanjoy Barua Technician 800 0.00% 26-Jun-12 3 years 193 Sankor Roy Group Head - T & D 7,500 0.00% 26-Jun-12 3 years 194 Santu Meah Peon 700 0.00% 26-Jun-12 3 years 195 Shah Alam Security Guard 500 0.00% 26-Jun-12 3 years 196 Shahidul Islam Junior Technician. 500 0.00% 26-Jun-12 3 years 197 Shahinur Islam Security Guard 500 0.00% 26-Jun-12 3 years 198 Shahjamal Security Guard 500 0.00% 26-Jun-12 3 years 199 Shaibal Dey Assistant Officer - VAT 1,100 0.00% 26-Jun-12 3 years 200 Shajedul Islam Technician 700 0.00% 26-Jun-12 3 years 201 Shamsul Islam Officer - Production 2,000 0.00% 26-Jun-12 3 years 202 Shamsuzzaman Security Guard 500 0.00% 26-Jun-12 3 years 203 Shapla Kanti Biswas Local Purchase Officer 700 0.00% 26-Jun-12 3 years 204 Sharan Barua Technician 500 0.00% 26-Jun-12 3 years Junior Officer - Customer 26-Jun-12 3 years 205 Sheikh Helal Uddin Ahamad 500 0.00% Service & Delivery Group CFO & Company 26-Jun-12 3 years 206 Shekhar Ranjan Kar 10,000 0.01% Secretary 207 Shibesh Kanti Datta Assistant In-Charge CSD 4,300 0.00% 26-Jun-12 3 years 208 Shipon Chakraborty Technician - Crane Operation 500 0.00% 26-Jun-12 3 years 209 Shobhon Mahbub Shahabuddin Head of National Sales 5,000 0.00% 26-Jun-12 3 years 210 Showkat Akber Security Guard 500 0.00% 26-Jun-12 3 years 211 Sk. Anowar Hossain Security Officer 1,100 0.00% 26-Jun-12 3 years 212 Sohel Junior Technician. 500 0.00% 26-Jun-12 3 years 213 Soumen Saha Assistant Front Desk Officer 500 0.00% 26-Jun-12 3 years 214 Stephen Gomes Senior Technician. 1,400 0.00% 26-Jun-12 3 years 215 Subodh Biswas Senior Officer - HR & IR 1,400 0.00% 26-Jun-12 3 years 216 Suman Chakrabarty Store Helper 500 0.00% 26-Jun-12 3 years 217 Suman Kanti Barua Peon 500 0.00% 26-Jun-12 3 years 218 Sunil Baran Das Typist 1,200 0.00% 26-Jun-12 3 years 219 Surajit Dutta Lead Credit Control (Steels) 1,500 0.00% 26-Jun-12 3 years Software Systems & 26-Jun-12 3 years 220 Syed Saiful Haque 500 0.00% Applications Developer
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221 T. M. Mahabub Senior Protocol Officer 2,600 0.00% 26-Jun-12 3 years 222 Tapan Barua Office Assistant 700 0.00% 26-Jun-12 3 years 223 Touhidul Alam Assistant Foreman 700 0.00% 26-Jun-12 3 years 224 Udayan dey Senior Technician 800 0.00% 26-Jun-12 3 years 225 Utpal Chakrabarty Junior Technician. 500 0.00% 26-Jun-12 3 years 226 Uttam Kumar Das Junior Officer 900 0.00% 26-Jun-12 3 years 227 Zafar Ahmed Assistant Foreman 600 0.00% 26-Jun-12 3 years 228 Zane Alam Md. Robayed B2C Sales Officer 500 0.00% 26-Jun-12 3 years 229 Zohirul Hoque Store Assistant 1,000 0.00% 26-Jun-12 3 years 230 Zunaid Hossain Mechanical Engineer 1,300 0.00% 26-Jun-12 3 years 231 A. K. M. Saifuddin Khan Head of Administration 1,600 0.00% 26-Jun-12 3 years 232 Abdul Gaffar Head of HR Operations 2,000 0.00% 26-Jun-12 3 years Engineer - Mechanical 26-Jun-12 3 years 233 Abdul Malek 1,000 0.00% Maintenance 234 Ahmad Adnan Saifullah Lead Travel 1,800 0.00% 26-Jun-12 3 years 235 Mr. Huzefa Nuruddin Asst. Manager- Cash 1,000 0.00% 26-Jun-12 3 years 236 Bappi Kanti Dhar Lead Chittagong Sales I 600 0.00% 26-Jun-12 3 years 237 Fahmina Asad Lead Talent Acquisition 500 0.00% 26-Jun-12 3 years 238 Fazle Hussain Nagaria In-Charge Scrap Sales 9,100 0.01% 26-Jun-12 3 years 239 Jabed Hossain Senior B2C Sales Officer 1,000 0.00% 26-Jun-12 3 years 240 Kamrul Ahasan Chowdhury In-Charge Legal 1,500 0.00% 26-Jun-12 3 years 241 Macsood Ul Alam In-Charge B2B Sales 2,600 0.00% 26-Jun-12 3 years Senior Hardware & 26-Jun-12 3 years 242 Manash Chowdhury 500 0.00% Networking Officer 243 Md. Ariful Islam In-Charge Compliance 1,200 0.00% 26-Jun-12 3 years 244 Md. Lutfur Rahman Bhuiyan Senior Estates Officer 2,400 0.00% 26-Jun-12 3 years Senior Talent Acquisition 26-Jun-12 3 years 245 Md. Mamunur Rahman 500 0.00% Officer 246 Mihir Datta Receivable Officer 1,000 0.00% 26-Jun-12 3 years In-charge Technical & 26-Jun-12 3 years 247 Mirza Md. Rafiqul Islam 1,000 0.00% Development Senior Talent Acquisition 26-Jun-12 3 years 248 Mohammad Hedayet Ullah 1,200 0.00% Officer Mohammad Mashudul Hoque Deputy Manager - HR 26-Jun-12 3 years 249 2,000 0.00% Chowdhury Operations 250 Mohammad Mosharaf Hossain Senior HR Operations Officer 500 0.00% 26-Jun-12 3 years Executive Business Support 26-Jun-12 3 years 251 Mohammad Tariqs Shah 1,000 0.00% (Chairmans Office) 252 Mohammad Yusuf Team Lead - Civil Project 3,900 0.00% 26-Jun-12 3 years 253 Mohammod Iftakhar Rasul Lead Chittagong Sales II 1,500 0.00% 26-Jun-12 3 years 254 Najim Uddin Talent Acquisition Officer 500 0.00% 26-Jun-12 3 years 255 Ranjit Kumar Paul Lead P & R (Steels) 2,200 0.00% 26-Jun-12 3 years 256 Santu Das In-Charge Provident Fund 500 0.00% 26-Jun-12 3 years 257 Subhasis Sengupta Lead Sales Support 3,500 0.00% 26-Jun-12 3 years 258 Tahsin Ahmad Chowdhoury Analyst (Group MDs Office) 400 0.00% 26-Jun-12 3 years 259 Tapan Sengupta Executive Director 10,000 0.01% 26-Jun-12 3 years 260 Ujjal Kanti Sen Receivable Officer 600 0.00% 26-Jun-12 3 years Total 335,400
** Shares were transferred to the employees of BSRM group as on 26th June 2012 from the sponsors (Mrs. Tehseen Zohair Taherali and Mrs. Bilkis Alihussain) of the company through Form-117. It is Mentionable here that no shares were issued other than existing shareholders by the company after issuance of the Commission‟s notification no SEC/CMRRCD/2009-193/114/Admin.28 dated October 2, 2011 except capital raising through merger as on 30 September, 2012.
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REFUND OF SUBSCRIPTION MONEY
As per BSEC Notification Dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant of the public offer by any of the following manner based on the option given by the applicant in the application form;
(a) Through banking channel for onward deposit of the refund money into the applicant‟s bank account as provided in the respective application form for subscription; or
(b) Through issuance of refund warrant in the name and address of the applicant as provided in the respective application form for subscription:
Provided that, in case of deposit into the applicant‟s bank account, the applicant will bear the applicable service charge, if any, of the applicant‟s banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected.
SUBSCRIPTION BY AND REFUND TO NON-RESIDENT BANGLADESHI (NRB)
1. A Non-Resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”.
2. The value of securities applied for by such person may be paid in Taka or US dollar or UK pound sterling or EURO at the rate of exchange mentioned in the securities application form.
3. Refund against oversubscription shall be made in the currency in which the value of securities was paid for by the applicant through Account Payee bank cheque payable at Dhaka with bank account number, Bank‟s name and Branch as indicated in the securities application form. If the applicants‟ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue and other banks as mentioned above under “Refund of Subscription Money”, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms.
AVAILABILITY OF SECURITIES
The Offer
1. IPO will be for 17,500,000 shares @ Tk. 35/- each (including premium of Tk. 25/- per share) totaling Tk. 612,500,000/- as per the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2006, 20% of total public offering shall be reserved for affected small investors, 10% for nonresident Bangladeshi (NRB) and 10% for mutual funds and collective investment schemes registered with the commission and remaining 60% shall be open for subscription by the general public. The position is thus as follows:
Particulars No. of Shares Amount (Tk.) A. 20% of IPO of Shares shall be reserved for affected small 3,500,000 122,500,000 investors (ক্ষতিগ্রস্ত ক্ষু দ্র তিতিয় োগকোরী) B. 10% of IPO of Shares shall be reserved for Non Resident 1,750,000 61,250,000 Bangladeshis C. 10% of IPO of Shares shall be reserved for Mutual funds and 1,750,000 61,250,000 Collective Investment schemes registered with the Commission D. Remaining 60% of IPO of Shares shall be opened for subscription 10,500,000 367,500,000 by The General Public. Total 17,500,000 612,500,000
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2. All securities as stated in sub–rule 1(A), 1(B) , 1(C) and 1(D) shall be offered for subscription and subsequent allotment by the issuer, subject to any restriction, which may be imposed, from time to time, by the Bangladesh Securities and Exchange Commission.
3. In case of over-subscription under any of the categories mentioned in sub–rule 1(A), 1(B) , 1(C) and 1(D) , the issue manager shall jointly conduct an open lottery of all the applications received under each category separately in accordance with the letter of consent issued by the Bangladesh Securities and Exchange Commission.
4. In case of under subscription under any of the 20% and 10% categories mentioned in sub–rule 1(A), 1(B) and 1(C), the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the issuer and the issue managers shall jointly conduct an open lottery of all the applicants added together.
5. In case of under subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriters.
6. The lottery as stated in clause –3 and 4 shall be conducted in presence of representatives from the issuer, the Stock Exchanges, and the applicants, if there be any.
Allotment
The company reserves the right of accepting any application, either in whole, or in part, successful applicants will be notified by the dispatch on an allotment letter by registered post/courier. Letter of allotment and refund warrants will be issued within 5 (five) weeks from the closing of the subscription. After allotment the company will have to transfer the shares to the allotees‟ Beneficiary Owners (BO) account, which has been mentioned in the application form.
The company shall issue share allotment letter to all successful applicants, within 5 (five) weeks, from the date of the subscription closing date. At the same time, the unsuccessful application shall be refunded with the application money within 5 (five) weeks from the closing of the subscription date, by Account Payee Cheque, without interest payable at Dhaka/Chittagong/Khulna/Rajshahi/Barisal/ Sylhet as the case may be.
Where allotment is made, in whole or in part in respect of joint application, the allotment letter will be dispatched to the person whose name appears first in the application form notwithstanding that the shares have been allotted to the joint applicants. Where joint applicant is accepted in part, the balance of any amount paid on application will be refunded without interest to the person named first in the application form.
APPLICATION FOR SUBSCRIPTION
1. Application for Shares shall be made for a minimum lot for 200 Ordinary Shares to the value of Tk. 7,000/- and should be made on the Bangladesh Steel Re-Rolling Mills Limited‟s Printed Application forms. Application Forms and Prospectus may be obtained from the Dhaka Office of the Company, members of the Dhaka Stock Exchange Ltd. And/or Chittagong Stock Exchange Limited or from the bankers to the Issue. In case adequate forms are not available, applicants may use photocopied / cyclostyled / hand written/typed copies of the forms. Applications must not be for less than 200 Ordinary Shares. Any application not meeting this criterion will not be considered for allotment purpose.
2. Joint application form for more than two persons will not be accepted. In the case of joint application each party must sign the application form.
3. Application must be in full name of individuals or limited companies or trusts or societies and not in the name of firms, minors or persons of unsound mind. Applications from insurance, financial
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and market intermediary companies must be accompanied by Memorandum and Articles of Association of that company.
4. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant.
5. The applicant shall provide with the same bank account number in the application form as it is in the BO account of the application.
6. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the commission will forfeit 15% (fifteen) of their subscription money too.
7. An IPO applicant shall ensure his/her BO account remains operational till the process of IPO (including securities allotment or refund of IPO application) is completed. If any BO account mentioned in the IPO application is found close, the allotted securities may be forfeited by BSEC.
8. Bangladeshi Nationals (including non-resident Bangladeshi Nationals residing abroad) and Foreign Nationals shall be entitled to apply for Shares.
9. Payment for subscription by investors other than Non –Resident Bangladeshi may be made to the said branches/offices of the banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque/Pay Order/Bank Draft shall be made payable to the bank to which it is sent and be marked “Bangladesh Steel Re-Rolling Mills Limited ” and shall bear the crossing “A/C Payee Only” and must be drawn on a bank in the same town of the bank to which application form is deposited.
10. A Non-Resident Bangladeshi (NRB) shall apply against the IPO either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out of foreign currency deposit account maintained in Bangladesh, for the value of securities applied for.
The value of securities applied for may be paid in Taka, US Dollar or Euro or UK Pound Sterling at the Spot Buying (TT Clean) rate of exchange prevailing on the date of opening of subscription. Refund against over-subscription of Shares shall be made in the currency in which the value of Shares applied for was paid by the applicant. Share Application Form against the quota for NRB shall be sent by the applicant directly along with a draft or cheque to Bangladesh Steel Re-Rolling Mills Limited at its corporate office. Copies of application Form and Prospectus shall be available with Bangladesh Embassy/High Commission in USA, UK, Saudi Arabia, U.A.E., Qatar, Kuwait, Oman, Bahrain, Malaysia and South Korea and website of the BSEC, Issuer Company, Issue manager, DSE and CSE.
11. All completed application forms, together with remittances for the full amount payable on application, shall be lodged by investors other than non-resident Bangladeshis with any of the branches of the Bankers‟ to the Issue.
12. The IPO subscription money collected from investors (other than Non-resident Bangladeshis) by the Bankers‟ to the Issue will be deposited to the Mutual Trust Bank Limited , Dilkusha Branch, Account No.0012-0320001294 with Bangladesh Steel Re-Rolling Mills Limited for this purpose.
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13. The subscription money collected from Non-resident Bangladeshis in US Dollar or UK Pound Sterling or EURO shall be deposited to the following FC accounts:
Name of the FC Sl No. Account No. Bank & Branch Currency Accounts Bangladesh Steel Re- Mutual Trust Bank Limited, 1 0012-0260001283 EURO Rolling Mills Limited Dilkusha 2 -do- 0012-0260001274 -do- GBP 3 -do- 0012-0260001265 -do- US Dollar
14. In the case of over-subscription of securities to the NRB applicants, refund shall be made by Bangladesh Steel Re-Rolling Mills Limited out of the “FC Account for IPO”. Bangladesh Steel Re- Rolling Mills Limited has already opened the aforesaid FC Accounts and shall close these FC Accounts after refund of over-subscription, if any.
15.
16. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information in the application shall make the application liable to rejection and subject to forfeiture of 25% of application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited application money or share (unit) will be deposited in account of the Bangladesh Securities and Exchange Commission (BSEC). This is in addition to any other penalties as may be provided for by the law
APPLICATIONS NOT IN CONFORMITY WITH THE ABOVE REQUIREMENTS AND THE INSTRUCTIONS PRINTED ON THE APPLICATION FORM ARE LIABLE TO BE REJECTED.
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SECTION XI
PLAN OF DISTRIBUTION
UNDERWRITING OF SHARES
Initial public Offering (IPO) is for 17,500,000 ordinary shares of Tk. 10/- each at an issue price of Tk. 35/-each including premium of Tk. 25/- per share totaling of Tk.612,500,000/- As per BSEC‟s Guideline 50% of the said amount i.e.8,750,000 ordinary shares of Tk.35/- each amounting to Tk. 306,250,000/- has been underwritten by following institutions:
Sl. No. of Shares Name and Address of Underwriters Amount (Tk.) No. Underwritten GSP Finance Company (Bangladesh) Limited 1 3,600,000 126,000,000 1/C, Paribagh, Mymenshing Road, Ramna,Dhaka-1000 Trust Bank Investment Limited 2 Peoples Insurance Bhaban(12th Floor),36 Dilkusha C/A, 2,000,000 70,000,000 Dhaka-1000 BD Finance Capital Holdings Limited 3 3,150,000 110,250,000 64 Motijheel Comercial Area , 2nd Floor, Dhaka-1000 Total 8,750,000 306,250,000
PRINCIPAL TERMS AND CONDITIONS OF UNDERWRITING AGREEMENT
1. If and to the extent that the Shares offered to the public by a Prospectus authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of subscription call upon the underwriter in writing with a copy of said writing to the Bangladesh Securities and Exchange Commission, to subscribe for the Shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed Shares within 15 (fifteen) days of the date of said notice and the said amount shall have to be credited into Shares subscription account within the said period.
2. If payment is made by Cheque/Bank Draft by an underwriter it will be deemed that the underwriter has not fulfilled his obligation towards his underwriting commitment under the Agreement, until such time as the Cheque/Bank Draft has been en-cashed and the Company‟s account credited.
3. In any case within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days, the Company shall send proof of subscription and payment by the underwriter to the Commission.
4. In the case of failure by the underwriter to pay for the Shares under the terms mentioned above, the said Underwriter will not be eligible to underwrite any issue, until such time as he fulfils his underwriting commitment under the Agreement and also other penalties as may be determined by the Commission may be imposed on him.
5. In case of failure by any underwriter to pay for the Shares within the stipulated time, the Company/Issuer will be under no obligation to pay any underwriting commission under the Agreement.
6. In case of failure by the Company to call upon the underwriter for the aforementioned purpose within the stipulated time, the Company and its Directors shall individually and collectively be held responsible for the consequence and/or penalties as determined by the Bangladesh Securities and Exchange Commission under the law as may be imposed on them.
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UNDERWRITER’S RIGHT TO REPRESENT IN THE BOARD OF DIRECTORS OF THE COMPANY
The Underwriters shall not have any right to have any representatives in the Company‟s Board of Directors.
COMMISSION FOR UNDERWRITERS
The Company shall pay to the underwriters an underwriting commission at the rate of 0.50% on 50% of Public Offering amount of the issue value of shares underwritten by them out of the public issue.
RIGHT OF UNDERWRITERS ON COMPANY’S BOARD
Underwriters have not acquired any right to have their representatives in the Board of Directors of the Company.
OFFICER OR DIRECTOR OF THE UNDERWRITERS ACTING AS DIRECTOR OF THE COMPANY
No officer or director of the underwriters acting as director of the company.
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SECTION XII
MATERIAL CONTRACTS AND OTHERS
ISSUE RELATED CONTRACT
a) Underwriting Agreement between the Company and the Underwriters. b) Issue Management Agreement between the Company and Alliance Financial Services Limited.
Copies of the aforementioned contracts and documents and a copy of Memorandum and Articles of Association of the Company and the Consent Order from the Bangladesh Securities and Exchange Commission may be inspected on any working day during office hours at the Office of the Company and the manager to the issue.
MANAGER TO THE ISSUE
Alliance Financial Services Limited, Rahman Chamber (3rd Floor) 12-13 Motijheel C/A, Dhaka-1000 is the Manager to the Issue. The Issue Manager will get Tk. 2,000,000/- as issue management fee.
COMMISSION TO THE BANKER TO THE ISSUE
Commission at the rate of 0.1% of the amount collected will be paid to the Bankers to the Issue for the services to be rendered by them.
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SECTION XIII
CORPORATE DIRECTORY
Issuer Bangladesh Steel Re-Rolling Mills Limited
Ali Mansion, 1099/1207 Sadarghat Road, Chittagong. Registered & Corporate Office Tel: +880 (31) 2854901-10, Fax: +880 (31) 610101 www.bsrm.com
Mahbub Castle (2nd & 4th Floor), 35/A Purana Paltan Line Inner Circular Road, (VIP Road), Dhaka Corporate Office Dhaka 1000, Bangladesh Tel: +880 (2) 8311994, 8313135, 9358135, Fax: +880 (2) 8312905,
Factory Re-rolling mills: 148/149, Baizid Bostami Road, Nasirabad I/A, Chittagong. Steel Melting Works: 78/79, Baizid Bostami Road, Nasirabad I/A, Chittagong.
Overseas office Flat 14, 3rd Floor, 28,Southren Avenue , Kolkata-700026, India. Tel:+91 33-24633378, 9831677886, 9038224421 , 9038633139
Rahman Rahman Huq Chartered Accountants Auditors 102 Agrabad Commercial Area Chittagong, Tel: 880-31-710704, 710996 Fax: 880-31-2520795
Alliance Financial Services Limited Manager to the Issue Rahman Chamber (3rd floor), 12-13 Motijheel C/A, Dhaka- 1000 Tel: +880 (2) 9515468, 9515469, Fax: +880 (2) 9515467, web: www.allfin.org
Credit Rating Information and Services Limited(CRISL) Nakshi Homes (4th & 5th Floor), 6/1A, Segunbagicha, Dhaka-1000 Rating Agency Tel:+880 (2) 9515807-8, Fax: +880 (2) 9565783 Web: www.crislbd.com
GSP Finance Company (Bangladesh) Limited Trust Bank Investment Limited Underwriters BD Finance Capital Holdings Limited
Lead Bank Mutual Trust Bank Limited BRAC Bank Limited Bank Asia Limited The City Bank Limited Dutch-Bangla Bank Limited Dhaka Bank Limited Eastern Bank Limited Investment Corporation of Bangladesh Bankers to the Issue Jamuna Bank Ltd. Mutual Trust Bank Limited Mercantile Bank Limited NCC Bank Limited Trust Bank Limited One Bank Limited Social Islami Bank Limited United Commercial Bank Limited
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SECTION XIV
AUDITOR’S REPORT AND RELATED CERTIFICATES
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BANGLADESH STEEL RE-ROLLING MILLS LTD. Report on the Financial Statements We have audited the accompanying financial statements of BANGLADESH STEEL RE-ROLLING MILLS LTD. (“the Company") and its associates which comprise the statement of financial position as at 31 December 2013, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Bangladesh Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2013, and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards.
Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994 and Securities and Exchange Rules 1987, we also report the following: (a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; (c) the statement of financial position, and the statement of profit or loss and other comprehensive income dealt with by the report are in agreement with the books of account; and (d) the expenditure incurred was for the purposes of the Company’s business.
Chittagong, 09 March 2014 Sd/- Rahman Rahman Huq Chartered Accountants
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BANGLADESH STEEL RE-ROLLING MILLS LTD. STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 31.12.2013 31.12.2012 Notes Taka Taka Assets Non-current assets: Property, plant and equipment 6 7,006,114,629 6,717,152,324 Capital work-in-progress 7 345,062,819 414,664,946 Investment in associate 8.01 3,268,469,944 1,984,714,569 Other investments 8.02 99,527,794 53,659,911 Total non-current assets 10,719,175,186 9,170,191,750 Current assets: Inventories 9 5,889,585,061 4,766,400,890 Trade receivables 10 404,867,366 543,137,398 Other receivables 11 78,591,566 148,881,245 Due from inter companies 12 2,277,089,379 1,409,473,023 Advances and deposits 13 1,597,513,355 484,118,657 Short term investments 8.03 78,011,752 232,608,160 Cash and cash equivalents 14 99,302,648 85,564,964 Total current assets 10,424,961,127 7,670,184,337 Total assets 21,144,136,313 16,840,376,087 Equity and Liabilities Equity: Share capital 15 1,558,510,380 1,558,510,380 General reserve 16.01 30,170,818 30,170,818 Revaluation surplus 16.02 4,129,104,568 4,189,255,118 Retained earnings 2,398,521,265 1,747,355,332 Fair Value reserve 16.03 2,439,152 1,023,492 Total equity 8,118,746,183 7,526,315,140 Liabilities: Non-current liabilities Long term loan 17.01 1,406,182,612 1,228,233,910 Deferred tax liabilities 18 1,071,987,675 882,458,633 Total non-current liabilities 2,478,170,287 2,110,692,543 Trade payables 19 3,563,424,229 2,781,935,317 Short term liabilities 20 3,631,028,292 3,351,042,310 Liabilities for expenses 21 216,856,037 117,142,297 Advance against sales 22 101,714,671 54,956,861 Due to inter companies 23 2,401,210,345 369,924,616 Long term loan-current portion 17.01 492,699,556 316,932,594 Provision for income tax 24 124,274,416 184,962,166 Provision for WPPF and Welfare Fund 25 806,385 2,665,273 Other liabilities 26 15,205,912 23,806,970 Total current liabilities 10,547,219,843 7,203,368,404 Total liabilities 13,025,390,130 9,314,060,947 Total equity and liabilities 21,144,136,313 16,840,376,087 The annexed notes 1 to 47 form an integral part of these financial statements.
Sd/- Sd/- Sd/- Managing Director Director Company Secretary As per our annexed report of same date.
Sd/- Rahman Rahman Huq Chittagong, 09 March 2014 Chartered Accountants
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BANGLADESH STEEL RE-ROLLING MILLS LTD. STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013 2013 2012 Notes Taka Taka
Revenue 27 8,602,415,008 14,043,421,488 Cost of sales 28 (8,102,322,738) (13,345,900,813) Gross profit 500,092,270 697,520,675 Selling and distribution costs 29 (55,646,511) (35,414,971) Administrative costs 30 (166,109,408) (176,030,894) (221,755,919) (211,445,865) 278,336,351 486,074,810 Other income 31 6,652,224 108,231 Operating profit 284,988,575 486,183,041 Finance costs 32 (264,396,406) (278,832,330) Finance income 33 23,390,549 34,150,796 Loss on revaluation of property, plant and equipment - (28,023,369) (241,005,857) (272,704,903) Profit before tax and WPPF and Welfare Fund 43,982,718 213,478,138 Contribution to WPPF and Welfare Fund (2,199,136) (10,673,907) 41,783,582 202,804,231 Non-operating income 34 169,063,732 150,068,986 Share of profit of associates (Net of tax) 35 934,127,635 312,954,478 1,103,191,367 463,023,464 Profit before tax 1,144,974,949 665,827,695 Income tax expense: Current Tax: Current year (124,274,416) (188,224,809) Previous year (6,612,039) (87,652) Deferred tax (225,386,883) (23,591,047) (356,273,338) (211,903,508) Net profit after tax for the year 788,701,611 453,924,187 Other comprehensive income: Items that will never be reclassified to profit or loss Revaluation of property, plant and equipment - 2,004,256,895 Deferred tax on revaluation surplus of assets - (212,067,263) - 1,792,189,632 Items that are or may be reclassified to profit or loss Available for sale financial assets- net change in fair value 1,756,824 1,023,492 Share of revaluation surplus of associate - 838,181,557 1,756,824 839,205,049 Other comprehensive income, net of tax 1,756,824 2,631,394,681 Total comprehensive income 790,458,435 3,085,318,868 Earnings per share: Basic earnings per share 36 5.06 2.91 The annexed notes 1 to 47 form an integral part of these financial statements.
Sd/- Sd/- Sd/- Managing Director Director Company Secretary As per our annexed report of same date.
Sd/- Chittagong, 09 March 2014 Rahman Rahman Huq Chartered Accountants
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BANGLADESH STEEL RE-ROLLING MILLS LTD. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013
Reserve for issuance General Revaluation Fair Value Share Capital Retained Earnings of shares against Total Reserve Reserve Reserve Merger Taka Taka Taka Taka Taka Taka Taka Balance as on 1 January 2012 643,454,910 30,170,818 1,619,084,375 1,840,565,341 271,600,560 - 4,404,876,004 - Issue of share against merger of MEW 271,600,560 - - - (271,600,560) - - Issue of Bonus share 643,454,910 - - (643,454,910) - - - - Transfer against difference in depreciation between cost - - (57,125,250) 91,400,400 - - 34,275,150 and revalued amount Revaluation surplus against revaluation of PPE - - 2,004,256,895 - - - 2,004,256,895 Deferred tax on revaluation surplus - - (212,067,263) - - - (212,067,263) Share of revaluation surplus of equity accounted - 838,181,557 - - - 838,181,557 investee Transfer of revaluation surplus on sale of revalued - - (3,075,196) 4,920,314 - - 1,845,118 assets Increase in fair value of investment in tradable - - - - - 1,023,492 1,023,492 securities Net profit after tax for the year ended 31 December - - - 453,924,187 - - 453,924,187 2012 Balance as on 31 December 2012 1,558,510,380 30,170,818 4,189,255,118 1,747,355,332 - 1,023,492 7,526,315,140 Balance as on 1 January 2013 1,558,510,380 30,170,818 4,189,255,118 1,747,355,332 - 1,023,492 7,526,315,140 Reclassification of fair value reserve on sale of securities - - - - (341,164) (341,164) Transfer against difference in depreciation between cost - - (51,796,412) 82,874,259 - - 31,077,847 and revalued amount Transfer of revaluation surplus on sale of revalued - - (8,354,138) 13,366,620 - - 5,012,482 assets
Cash dividend for the year 2012 - - - (233,776,557) - - (233,776,557) Net profit after tax for the year ended 31 December - - - 788,701,611 - - 788,701,611 2013 Increase in fair value of investment in tradable - - - - - 1,756,824 1,756,824 securities Balance as on 31 December 2013 1,558,510,380 30,170,818 4,129,104,568 2,398,521,265 - 2,439,152 8,118,746,183
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BANGLADESH STEEL RE-ROLLING MILLS LTD. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012 Taka Taka a. OPERATING ACTIVITIES: Paid against revenue expenditure (8,555,015,718) (12,694,385,182) Receipts from customers against sales 8,787,022,059 13,896,087,393 Receipt against other income 190,805,958 135,994,880 Payment for Workers' Profit participation fund (4,058,024) (24,783,700) Payment of interest-Net (170,392,847) (514,169,155) Income Tax Paid (166,350,580) (265,067,537)
Net cash provided by/(used in) Operating Activities 82,010,848 533,676,699 b. INVESTING ACTIVITIES: Acquisition of property, plant and equipment (95,680,881) (176,139,631) Proceeds from sale of property, plant and equipment 33,393,389 9,032,500 Short term loan to affiliated companies (867,616,356) 932,616,174 Investment (1,397,013,883) (121,226,303) Proceeds from sale of investments in tradable securities and FDRs 157,727,397 177,725,197 Capital Work-in-progress (433,233,750) (387,980,463) Dividend income 101,588,742 153,084,190 Net cash used in Investing Activities (2,500,835,342) 587,111,664 c. FINANCING ACTIVITIES: Receipt/(Re-payment) of Term Loan 353,715,664 834,259,148 Loan received from /(paid to) affiliated companies and others 2,031,285,729 (2,115,887,196) Dividend paid (232,425,197) - Share application money refunded - (788,759) Receipts of Short term loan 279,985,982 152,470,719
Net cash (used in)/provided by Financing Activities 2,432,562,178 (1,129,946,088)
Total (a+b+c) 13,737,684 (9,157,725)
Opening cash and cash equivalents 85,564,964 94,722,689 Closing cash and cash equivalents 99,302,648 85,564,964 13,737,684 (9,157,725)
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BANGLADESH STEEL RE-ROLLING MILLS LTD. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2013 1.00 REPORTING ENTITY 1.01 Company Profile
Bangladesh Steel Re-Rolling Mills Limited is a public company limited by shares is domiciled in Bangladesh. The address of the company's registered office is Ali Mansion, 1099/1207 Sadarghat Road, Chittagong, Bangladesh. The Company was formed and incorporated with the Registrar of Joint Stock Companies and Firms in Bangladesh on December 28, 1960 vide the certificate C/186-No. 1491/92 E.P. of 1960-1961 under Companies Act 1913 (since repealed and substituted by the Companies Act 1994) as a private company limited by share. The company was converted into a public limited company on November 03, 2009 under the Companies Act 1994.
1.02 Nature of the business The main activity of the company is to manufacture M.S. products by setting up rolling and re-rolling mills. The company has set up its Re-Rolling mill and Steel Melting Workshop (SMW previously known as Meghna Engineering Works Limited) at 147/148/149 and 78/79 Baizid Bostami Road, Nasirabad Industrial Area, Chittagong, Bangladesh respectively and commenced its commercial production from 1987 after first BMRE. M.S. billets is manufactured from scraps and sponge iron etc. at Steel Melting Workshop (SMW) and these billets are re-rolled in the next step at Re-Rolling Mills to manufacture M.S. products. The company also deals in sale of M.S. products like angle, channel, I Beam, H Beam and ingot etc. which is very insignificant compared to the sale of own manufactured products. 1.03 Description of associates (i) Legal form of BSRM Steels Ltd.
BSRM Steels Ltd. was incorporated on 20th July, 2002, vide the certificate C-No. 4392 of 2002 as a private limited company under Companies Act 1994. The company was converted to a public limited company on 20 December 2006. The company is listed with Dhaka Stock Exchange and Chittagong Stock Exchange as a publicly quoted company. Trading of the shares of the company started in two stock exchanges from 18 January 2009. Bangladesh Steel Re-Rolling Mills Limited directly holds 31.188% of ordinary shares in BSRM Steels Ltd.
Nature of the business The main purpose of BSRM Steels Ltd. is to manufacture M.S.products by setting up rolling and re-rolling mills. The company had set up its Rolling mill at 4 Fouzderhat Industrial Estate, Latifpur, Sitakunda, Chittagong and commenced commercial production from 01 April 2008. (ii) Legal form of BSRM Iron & Steel Co. Ltd. BSRM Iron & Steel Co. Ltd. (BISCO) was incorporated as a private Limited Company on 13th April, 2005, vide certificate No. CH-5415 of 2005 under the Companies Act, (No-XVIII), 1994. The Company was converted into a public limited company on March 15, 2011. The Company's Registered and Corporate Office is situated at Ali Mansion, Sadarghat Road, Chittagong. It is a subsidiary company of BSRM steels Limited that holds 95% ordinary shares in (BISCO). As a result Bangladesh Steel Re-Rolling Mills Limited indirectly holds 29.629% shares in BISCO and has significant influence over it. Nature of the business The principal activities of the company are manufacturing M.S. Billets of different qualities and selling the same to steel rolling mills. The company had set up its automatic steel melting plant at 202-205 Nasirabad Industrial Area, Baizid Bostami Road, Chittagong and commenced commercial production from 1st June, 2010.
(iii) Legal form of BSRM Steel Mills Ltd. BSRM Steel Mills Ltd., was incorporated as a private limited company on 16 April 2008 vide registration # CH- 6561(267)/2008 under the Companies Act, 1994 to set up one of the largest production plant in the steel industries in Bangladesh. The company was converted into public limited company on 12 November 2013. Bangladesh Steel Re-Rolling Mills Limited holds 21.76% of ordinary shares directly and 6.79% of ordinary shares indirectly in BSRM Steel Mills Ltd. Nature of the business The company is engaged in setting up an automatic steel melting plant for making different quality of M.S billet and sell the same to steel rolling mills. The company has not yet commenced commercial production.
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2.00 BASIS OF PREPARATION 2.01 Statement of compliance These financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards (BFRSs), applicable sections of Companies Act 1994 and the Securities and Exchange Rules 1987. BFRSs comprise the following: (i) Bangladesh Financial Reporting Standards. (BFRSs) (ii) Bangladesh Accounting Standards. (BASs) (iii) Interpretations of BFRSs and BASs. 2.02 Date of authorization These financial statements have been authorized for issue by the Board of Directors on 09 March 2014.
2.03 Regulatory compliance The company is required to comply with amongst others, the following laws and regulations: (i) The Companies Act 1994 (ii) The Securities and Exchange Ordinance 1969 (iii) The Securities and Exchange Rules 1987 (iv) The Income Tax Ordinance 1984 (v) The Income Tax Rules 1984 (vi) The Value Added Tax Act 1991 (vii) The Value Added Tax Rules 1991 (viii) Bangladesh Labour Act 2006 2.04 Basis of measurement These financial statements have been prepared on going concern basis under the historical cost convention except for investment in tradable shares and property, plant and equipment which are measured at fair value. 2.05 Functional and presentation currency These financial statements are presented in Bangladesh Taka (BDT) which is the company's functional currency. All financial information presented in BD Taka has been rounded off to the nearest Taka except when otherwise indicated. 2.06 Statement of Cash flows Statement of cash flows has been prepared as per BAS 7: Statement of Cash Flows using Direct Method as per the requirement of Securities and Exchange Rules 1987 and the Companies Act 1994.
2.07 Use of estimates and judgments The preparation of financial statements in conformity with BFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and assumptions are reviewed on an ongoing basis. The estimates and underlying assumptions are based on past experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. 2.08 Comparative information Comparative information has been disclosed in respect of the year 2012 for all numeric information in the financial statements and also the narrative and descriptive information where it is relevant for understanding of the current year's financial statements. Figures for the year 2012 have been rearranged wherever considered necessary to ensure comparability with the current year.
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2.09 Going concern The Company has adequate resources to continue its operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. As per management's assessment there are no material uncertainties related to events or conditions which may cast significant doubt upon the company’s ability to continue as a going concern. 2.10 Reporting period These Financial Statements covered the reporting period of one year commencing from 01 January 2013 to 31 December 2013 which is followed consistently. 2.11 Merger of common control company By virtue of the decision of the High Court Division and approval of the Bangladesh Securities and Exchange Commission, Meghna Engineering Works Limited was merged with Bangladesh Steel Re-Rolling Mills Ltd. with effect from 01 January 2011 and a total of 27,160,056 Nos. Ordinary Shares of Tk. 10 each totaling Taka 271,600,560 of Bangladesh Steel Re-Rolling Mills Ltd. was issued to shareholders of Meghna Engineering Works Limited (MEWL). In absence of specific accounting standards for recording such common control business combination, generally accepted accounting practices in other countries has been followed as per provisions of BAS 8.12. As per generally accepted accounting practices, polling of interests method has been followed by the company under which assets, liabilities and reserves of MEWL have been recorded under specific line items of the company and comparatives are restated as if the acquiree had always been merged with the company. 3.00 SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all the years presented in these financial statements by the company except otherwise mentioned. 3.01 Property, plant and equipment (PPE) Items of property, plant and equipment are stated at cost and re-valued amount less accumulated depreciation and accumulated impairment losses, if any. 3.01.01 Recognition and measurement The cost of an item of property, plant and equipment comprises its purchase price, import duty and non-refundable taxes (after deducting trade discount and rebates) and any cost directly attributable to the acquisition of the assets. The cost of self constructed/installed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner and the cost of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and is recognised under other income/expenses in profit or loss. 3.01.02 Subsequent costs The cost of replacing or upgrading part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss.
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3.01.03 Depreciation Depreciation is based on the cost/revalued amount of an asset. Significant parts of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised in profit or loss on diminishing balance method over the estimated useful lives of each parts of property, plant and equipment. Depreciation is charged on addition commencing from the year of acquisition and no depreciation is charged in the year of disposal. The principal annual rates are as follows. Assets Rates (%) Land and land development Nil Plant and Machinery 7.50% - 15% Motor Vehicle 20% Air Conditioner and air compressor 15% - 20% Furniture and Fixtures 10% Office Equipments 15% Buildings and sheds 5% - 15% Depreciation methods, useful lives and residual values are reassessed at the reporting date and adjusted if appropriate. 3.01.04 Revaluation of Property, plant and equipment All property, plant and equipment of the company were revalued by M/S Hoda Vasi Chowdhury & Co., Chartered Accountants, in 2008 and 2012 considering the book value of such assets on December 31, 2006 and December 31, 2011 respectively. As per report of revaluation, net revaluation gain stands at Tk. 1,673,400,176 and Tk. 2,004,256,895 in 2008 and 2012 respectively. These revaluations have been recognized in the financial statements at the beginning of the year 2008 and 2012 respectively. Replacement cost and net realisable value method, as applicable, have been used by the independent valuer in re- valuation of property, plant and equipment. Difference of depreciation between revalued carrying amount and depreciation based on carrying amount as per assets' original cost has been transferred from Revaluation Reserve to Retained Earnings as shown in Statement of Changes in Equity. 3.02 Capital work in progress Capital work in progress consists of cost incurred for acquisition of new plant and machinery, civil structure, factory shed for warehouse etc. which were not ready for use till reporting date. 3.03 Leases At inception of an arrangement, the company determines whether the arrangement is or contains a lease. At inception or on reassessment of an arrangement that contains a lease, the entity separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values.
3.03.01 Finance Lease Leases in terms of which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance lease are apportioned between the finance expense and the reduction of outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant rate of interest on the remaining balance of the liability.
3.03.02 Operating lease Leases that are not finance lease are considered as operating leases and the leased assets are not recognised in the company's Statement of Financial Position. Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease.
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3.03.03 Leasehold land Factory buildings of the company are situated at Nasirabad Industrial Area, Chittagong on leasehold lands measuring 7.905 acres. These lands are taken on lease for 99 years on payment of salami and renewable thereafter. These lands are duly mutated in the name of the company. These leasehold lands are recognised as assets under property, plant and equipment. Since significant risks and rewards incidental to ownership of these assets are transferred to the company, these are covered under revaluation of assets done in 2008 and 2012. Being rights to use of these lands are of perpetual nature, no amortization of value of lands are recognised in the financial statements over the lease period. 3.04 Inventories Inventories are measured at lower of cost and net realisable value. The cost of inventories is calculated based on the weighted average method and includes expenditure incurred in acquiring these inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition in accordance with BAS-2. Category Valuation Finished Goods - Finished Goods are valued at Cost or Net Realisable Value whichever is lower. Raw materials - Raw Materials are valued at Cost or Net Realisable Value whichever is lower. Store items - Based on weighted average method. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses.
3.05 Trade and other receivables Trade and other receivables are initially recognised at cost which is the fair value of the consideration given in return. After initial recognition, these are carried at cost less impairment losses, if any, due to uncollectibility of any amount so recognised. There is no fixed company policy regarding provision for impairment loss on receivables, if any receivables are not realized within the credit period. It has been dealt with on case to case basis. 3.06 Transactions with inter companies These represent balance amounts due to /from sister concerns which are derived from short term loan, sale/purchase of goods from time to time. Sales and purchase of goods are made on arm's length basis and interest on balances are charged at 15.50% per annum. These balances are unsecured but considered good and realisable.
3.07 Advances, deposits and prepayments Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or charges to other account heads such as property, plant and equipment, inventory or expenses. Deposits are measured at payment value. Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to profit or loss. 3.08 Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term fixed deposits with banks. 3.09 Impairment Financial assets Financial assets are impaired if objective evidence indicates that a loss event has occurred after initial recognition of the assets and that the loss event had a negative effect on the estimated future cash flows of that assets that can be estimated reliably. Financial assets not classified as at fair value through profit or loss , including an interest in an equity accounted investee, are assessed at each reporting date to determine whether there is objective evidence of impairment.
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Objective evidence that financial assets are impaired includes : - default or delinquency by a debtor - restructuring of an amount due to the company on terms that the company would not consider otherwise - indications that a debtor or issuer will enter bankruptcy - adverse changes in the payment status of borrowers or issuers - the disappearance of an active market for a security, or - observable data indicating that there is a measurable decrease in expected cash flows from a group of financial assets For an investment in an equity security, objective evidence of impairment includes a significant or prolonged decline in its fair value below its cost. Financial Assets measured at Amortized cost The company considers evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Collective assessment is carried out by grouping together assets with similar risks characteristics. In assessing collective impairment, the company uses historical information on the timing of recoveries and the amount of loss incurred, and makes any adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends. An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the estimated future cash flows discounted at the assets' original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account. When the company considers that there is no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss. Available for sale financial assets
Impairment losses on available for sale financial assets are recognized by reclassifying the losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value, less any impairment loss previously recognized in profit or loss. If the fair value of an impaired available for sale debt security subsequently increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed through profit or loss; otherwise, it is reversed through other comprehensive income.
Equity accounted investees An impairment loss in respect of an equity accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss, is recognized in profit and loss, and is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. Non financial assets The carrying amounts of the company's property, plant and equipments are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the property, plant and equipment's recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses, if any, are recognized in the statement of profit or loss and other comprehensive income.
3.10 Employee benefit schemes 3.10.01 Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. 3.10.02 Defined contribution plan (Recognized provident fund) A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate fund and will have no legal or constructive obligation to pay further amount. The Employees’ Provident Fund was obtained recognition from Income Tax Authority on August 05, 1975 which was effective from September 30, 1973 and is considered as defined contribution plan as it meets the recognition criteria specified for this purpose in BAS-19.
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Obligation for contribution to defined contribution plan is recognized as provident fund (PF) contribution expenses in profit or loss in the period during which services are rendered by employees. Advance against PF is recognized as an asset to the extent that a cash refund or a reduction in future payments is available. The company maintains the Recognized Provident Fund for all permanent employees at which both the company and employees contribute @ 10% of basic salary. Appropriate provision has been made for Workers' Profit Participation Fund and Workers' Welfare Fund as per provisions of law. Currently the rate of provision is 5% on net profit before tax and WPPF and Welfare fund.
3.11 Provisions and contingencies 3.11.01 A provision is recognized in the financial statements if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation.
3.11.02 Contingencies arising from claim, lawsuit, etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured.
3.12 Earnings Per Share (EPS) Basic Earnings: This represents profit for the year attributable to ordinary shareholders. As there is no preference dividend, non- controlling interest or extra ordinary items, the net profit after tax for the year has been considered fully attributable to the ordinary shareholders (refer to Note-36 to the Financial Statements). Diluted Earnings: No diluted earnings per share is required to be calculated for the year as there is no scope for dilution during the year under audit. 3.13 Finance income and expenses Interest income on FDR and STD Account has been recognized on cash basis. Interest income/expenses on amount due to/due from inter companies has been recognized periodically. 3.14 Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency (BDT) at exchange rates at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at reporting date are re-translated into Bangladesh Taka at the exchange rates ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies, stated at historical cost, are translated into Bangladesh Taka at the exchange rate ruling at the date of transaction. Foreign exchange differences arising on translation are recognized in profit or loss.
3.15 Income tax expenses Tax expenses comprises current and deferred tax. Current tax and deferred tax are recognized in profit and loss except to the extent that it relates to items recognized directly in equity or in other comprehensive income. Current tax: Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using rates enacted or substantially enacted at the reporting date and any adjustment to tax payable in respect of previous years. Current tax also includes any tax arising from dividends.
Deferred tax: Deferred tax is recognized in compliance with BAS 12: Income taxes, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amount used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the authority on the same taxable entity. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
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Deferred tax on temporary differences between carrying amounts of investments in associates and tax bases has been recognised following the tax rates applicable for profit on disposal of investments as well as distributions from associates. Deferred tax on revaluation surplus of lands has not been recognized in the financial statements on the ground that income tax payable at source on capital gain during registration of sale of land are generally borne by the buyer. Hence, possibility of having any income tax implications on land is very remote. 3.16 Revenue Revenue from sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and rebates, if any. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. The timing of the transfer of risk and rewards depends on the individual terms of the sales agreement.
3.17 Management fees Bangladesh Steel Re-Rolling Mills, the reporting entity, entered into a management sharing agreement with BSRM Steels Ltd., an investee company, on October 15, 2005 for allowing BSRM Steels Ltd. to use its goodwill. According to the terms of the agreement, Bangladesh Steel Re-Rolling Mills Ltd. is entitled to receive Tk. 300 per MT (in 2012: Tk. 250 per MT) of monthly production as management fee on monthly basis provided that BSRM Steels Ltd. has net profit in its monthly financial statements. 3.18 Borrowing costs Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying assets are recognized in profit or loss using effective interest method. Borrowing cost incurred against loan for BMRE project have been capitalized under effective interest rate method. 3.19 Interest on balance of inter companies Interest on balances due to /due from inter companies has been recognized in the financial statements periodically. Interest @ 15.50% per annum is charged to these short term loan balances as per Board's Resolution dated January 04, 2012. 3.20 Investments in associates
An associate is an entity in which the Company has significant influence and which is neither a subsidiary nor a joint venture. The Company’s investment in associates is accounted for in the Financial Statements using the Equity Method in accordance with BAS 28: ‘Accounting for investment in associates’. Such investments are classified as non-current assets in the statement of financial position and the share of profit/loss of such investment is classified under as share of profit form associate in the statement of profit or loss and other comprehensive income.
The excess of company's share of net assets' value of associates over cost of investments has been recognized in profit or loss as share of associate's profit or loss during the year following the provisions of BAS-28. Unrealized gains and losses arising from transactions with associate are eliminated against the investment to the extent of the company's interest in investee. 3.21 FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 3.21.01 Financial assets The Company initially recognizes loans and receivables on the date that they are originated. All other financial assets are recognized initially on the date at which the company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Financial assets are classified into the following categories: financial assets at fair value through profit or loss, held to maturity, loans and receivables and available-for-sale financial assets.
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At fair value through profit or loss
A financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is designated as such on initial recognition. Financial assets are designated as at fair value through profit or loss if the company manages such investment and makes purchase or sale decisions based on their fair value in accordance with the company's documented risk management or investment strategy. Attributable transactions costs are recognized in profit and loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein which take into account and dividend income are recognized in profit or loss.
Held to maturity These assets are initially recognized at fair value plus any directly attributable transaction cost. Subsequent to initial recognition, they are measured at amortized cost using the effective interest method. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost. Loans and receivables comprise cash and cash equivalents, loans and trade and other receivables. (a) Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash at bank which are available for use by the company without any restriction. (b) Trade and other receivables Trade and other receivables represent the amounts due from customers for delivering goods or rendering services. Trade and other receivables are initially recognized at cost which is the fair value of the consideration given in return. After initial recognition these are carried at amortized cost less impairment losses due to uncollectibility of any amount so recognised. Available-for-sale
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale and are not classified in any other categories of financial assets. Generally available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs and subsequent to initial recognition at fair value and changes therein other than impairment losses are recognized in other comprehensive income and presented in the fair value reserve in equity. Financial assets which are not traded in the market have been valued at cost unless any indication of impairment in value of such financial assets exist. Cumulative gain/losses recognized in the other comprehensive income are reclassified from equity to profit or loss upon derecognition.
Available-for-sale financial assets comprise investment in equity securities and debt securities. 3.21.02 Financial liabilities The company initially recognises financial liabilities on the date that are originated. The company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.
The company classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value less directly attributable transaction cost. Subsequent to initial recognition, these financial liabilities are measured at amortized cost. Other financial liabilities comprise loans and borrowings, bank overdrafts and trade and other payables. (a) Trade and other payables Trade and other payables represent the amounts due to customers for receiving goods or services. Trade and other payables are initially recognised at cost which is the fair value of the consideration received. After initial recognition these are carried at amortised cost. (b) Other liabilities Other liabilities represents the amounts due to various parties for receiving services. These are initially recognised at cost which is the fair value. After initial recognition these are carried at amortised cost. 3.21.03 Equity Instruments Share capital (ordinary shares) Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as expenses.
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4.00 MEASUREMENT OF FAIR VALUES When measuring the fair value of an asset or liability, the entity uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows. Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for the assets or liability that are not based on observable market data. If the inputs used to measure the fair value of an asset or liability might be categorized in different levels of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Property, plant and equipment The fair value of items of property, plant and equipments has been determined based on the depreciated replacement cost method and net realizable value method as applicable. Equity and debt securities Fair values of tradable equity and debt securities are determined by reference to their quoted closing price in active market at the reporting date which are categorized under 'Level 1' of the fair value hierarchy.
5.00 New Standards and interpretations not yet adopted New standards or interpretations that have been adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) and effective from January 01, 2013 are duly adopted by the company.
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6.00 Property plant and equipment(PPE) for 2013 At revalued model: Revalued amount Depreciation Carrying Closing balance Opening balance Closing balance Opening balance as Disposal/ Charged for Adjustment amount as on 31 Assets' category Addition as on 31 as on 1 January as on 31 on 1 January 2013 Adjustment the year for disposal December 2013 December 2013 2013 December 2013 Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Land and land 3,770,747,745 2,479,347 - 3,773,227,092 - - - - 3,773,227,092 development Plant and machineries 2,661,493,410 231,652,281 (27,403,712) 2,865,741,979 202,210,792 202,220,705 (2,055,278) 402,376,219 2,463,365,760 Motor vehicles 42,776,218 8,513,792 (5,368,617) 45,921,393 8,555,244 7,686,535 (1,066,522) 15,175,257 30,746,136 Factory building and shed 440,648,172 347,843,126 - 788,491,298 29,956,274 62,158,305 - 92,114,579 696,376,719 Furniture and fixtures 29,406,517 3,425,518 - 32,832,035 4,086,235 3,975,851 - 8,062,086 24,769,949 Office equipment 19,866,096 3,836,955 - 23,703,051 2,977,289 3,096,789 - 6,074,078 17,628,973 6,964,938,158 597,751,019 (32,772,329) 7,529,916,848 247,785,834 279,138,185 (3,121,800) 523,802,219 7,006,114,629 At cost model The carrying amount that would have been recognised had the assets been carried under cost model as under: Cost Depreciation Carrying Closing balance Opening balance Closing balance Opening balance as Disposal/ Charged for Adjustment amount as on 31 Assets' category Addition as on 31 as on 1 January as on 31 on 1 January 2013 Adjustment the year for disposal December 2013 December 2013 2013 December 2013
Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Land and land 1,788,130,713 2,479,347 - 1,790,610,060 - - - - 1,790,610,060 development Plant and machineries 2,684,666,199 231,652,281 (15,399,567) 2,900,918,913 1,208,349,748 128,588,923 (1,154,967) 1,335,783,704 1,565,135,209 Motor vehicles 64,285,429 8,513,792 (2,525,632) 70,273,589 38,273,859 6,515,598 (486,323) 44,303,134 25,970,455 Factory building and shed 565,933,244 347,843,126 - 913,776,370 287,744,869 54,651,855 - 342,396,724 571,379,646 Furniture and fixtures 43,627,171 3,425,518 - 47,052,689 21,318,401 3,506,001 - 24,824,402 22,228,287 Office equipment 36,359,420 3,836,955 - 40,196,375 20,105,155 3,001,549 - 23,106,704 17,089,671 5,183,002,176 597,751,019 (17,925,199) 5,762,827,996 1,575,792,032 196,263,926 (1,641,290) 1,770,414,668 3,992,413,328
Depreciation allocated to: 31.12.2013 31.12.2012 Taka Taka Cost of sales ( Note 28.01) 268,033,053 237,073,737 Administrative costs ( Note 30.00) 11,105,132 10,712,097 279,138,185 247,785,834
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6.00 Property plant and equipment(PPE) for 2012 (Continued) At revalued model: Revalued amount Depreciation Revaluation Carrying Opening balance Closing balance Opening Closing balance Addition/ adjustment Adjustment for Charged for Adjustment for amount as on 31 Assets' category as on 1 January Disposal as on 31 balance as on 1 as on 31 revaluation for loss on revaluation the year revaluation December 2012 2012 December 2012 January 2012 December 2012 revaluation Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Land and land development 2,254,278,307 1,516,469,438 - - - 3,770,747,745 - - - - 3,770,747,745 Plant and machineries 3,447,184,395 550,087,159 - (25,688,326) (1,310,089,818) 2,661,493,410 1,310,089,818 202,210,792 (1,310,089,818) 202,210,792 2,459,282,618 Motor vehicles 55,141,838 30,851,550 (9,642,631) (1,899) (33,572,640) 42,776,218 33,572,640 8,555,244 (33,572,640) 8,555,244 34,220,974 Factory building and shed 649,454,317 76,511,521 - (863,129) (284,454,537) 440,648,172 284,454,537 29,956,274 (284,454,537) 29,956,274 410,691,898 Furniture and fixtures 35,990,727 11,011,152 - (82,365) (17,512,997) 29,406,517 17,512,997 4,086,235 (17,512,997) 4,086,235 25,320,282 Office equipment 29,616,381 7,944,899 (49,500) (1,387,650) (16,258,034) 19,866,096 16,258,034 2,977,289 (16,258,034) 2,977,289 16,888,807 6,471,665,965 2,192,875,719 (9,692,131) (28,023,369) (1,661,888,026) 6,964,938,158 1,661,888,026 247,785,834 (1,661,888,026) 247,785,834 6,717,152,324 At cost model The carrying amount that would have been recognised had the assets been carried under cost model as under: Cost Depreciation Revaluation Carrying Opening balance Closing balance Opening Closing balance adjustment Adjustment for Charged for Adjustment for amount as on 31 Assets' category as on 1 January Addition Disposal as on 31 balance as on 1 as on 31 for loss on revaluation the year revaluation December 2012 2012 December 2012 January 2012 December 2012 revaluation Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Tk. Land and land development 1,710,405,468 77,725,245 - - - 1,788,130,713 - - - - 1,788,130,713 Plant and machineries 2,616,063,097 68,603,102 - - - 2,684,666,199 1,086,782,771 121,566,977 - 1,208,349,748 1,476,316,451 Motor vehicles 52,131,580 16,876,166 (4,722,317) - - 64,285,429 31,770,966 6,502,893 - 38,273,859 26,011,570 Factory building and shed 552,202,103 13,731,141 - - - 565,933,244 265,811,713 21,933,156 - 287,744,869 278,188,375 Furniture and fixtures 36,663,035 6,964,136 - - - 43,627,171 17,801,235 3,517,166 - 21,318,401 22,308,770 Office equipment 31,689,886 4,719,034 (49,500) - - 36,359,420 17,239,913 2,865,242 - 20,105,155 16,254,265 4,999,155,169 188,618,824 (4,771,817) - 5,183,002,176 1,419,406,598 156,385,434 - 1,575,792,032 3,607,210,144
6.01 Carrying amount of land and land development under revalued model are made up as follows: 31.12.2013 31.12.2012 Tk. Tk.
Leasehold land 1,832,242,500 1,832,242,500 Freehold land 1,940,984,592 1,938,505,245 3,773,227,092 3,770,747,745
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31.12.2013 31.12.2012 Taka Taka 7.00 Capital work-in-progress Building and shed- upgradation and expansion of BSRM 285,976,700 83,577,527 Building and Factory Shed - Storage and delivery shed 58,969,638 326,028,919 Plant and machinery - construction of 16 MT Furnace at SMW - 1,028,321 Building and Factory Shed - Shed for generator - 3,187,691 Building and Factory Shed - construction of boundary wall 116,481 842,488 345,062,819 414,664,946
These represent cost incurred for construction of building and factory shed at existing factory premises at Nasirabad Industrial Area, Chittagong.
8.00 Investment Investment in associates (Note-8.01) 3,268,469,944 1,984,714,569 Other investments (Note-8.02) 99,527,794 53,659,911 Short term investments (Note-8.03) 78,011,752 232,608,160 3,446,009,490 2,270,982,640 8.01 Investment in associates BSRM Steels Ltd. (BSL) 2,319,969,214 1,984,714,569 BSRM Steel Mills Ltd. (BSML) 948,500,730 - 3,268,469,944 1,984,714,569
Movement of investment in associates 2013 2012 BSML BSL BSL Taka Taka Taka Opening balance 13,500,000 1,984,714,569 990,711,483
Addition during the period: Investment in associate 437,646,000 - - Share of profit/(loss) of equity accounted investee (associates) (1,543,996) 434,939,131 310,999,948 Excess of proportionate net assets' value of associates over 498,898,726 - - acquisition cost Share of revaluation surplus of equity accounted investee - - 838,181,556 (associate) 935,000,730 434,939,131 1,149,181,504 948,500,730 2,419,653,700 2,139,892,987 Adjusted/ disposal during the period: Sale of share of the equity accounted investee - - (4,105,558) Cash dividend received - (101,518,260) (153,027,390) - (101,518,260) (157,132,948) Unrealized profit (net) in inventory (Note-3.20) - 1,833,774 1,954,530 Closing balance 948,500,730 2,319,969,214 1,984,714,569
Movement of shareholding in associate No. of shares 2013 2012 BSML BSL BSL Opening balance 1,350,000 101,518,260 102,018,260 No. of shares acquired 43,764,600 - - No. of bonus share received - 5,075,913 - No. of shares sold - - (500,000) Closing balance 45,114,600 106,594,173 101,518,260
Total number of shares in associates 207,300,000 341,775,000 325,500,000
Percentage of holding of shares of associate by BSRM Ltd. 21.763% 31.188% 31.188%
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Summary of financial information of equity accounted investee:
Name of the investee: BSRM Steels Ltd. BSRM Steel Mills Ltd.
Reporting date: 31 December 2013 31 December 2013
31.12.2013 31.12.2012 31.12.2013 31.12.2012
Ownership 31.19% 31.19% 21.76% 13.50% Tk. Tk. Tk. Tk. Current assets 18,037,267,454 17,171,400,659 907,272,669 141,612,073 Non-current assets 10,118,158,864 9,635,182,667 5,194,648,732 3,572,102,429 Total assets 28,155,426,318 26,806,583,326 6,101,921,401 3,713,714,502 Current liabilities 19,104,954,216 18,822,222,385 834,288,912 658,553,463 Non-current liabilities 1,520,165,489 1,536,770,985 - - Total liabilities 20,625,119,705 20,358,993,370 834,288,912 658,553,463 Revenue 36,294,868,280 38,262,395,136 - - Other income 151,433,367 524,464,195 90,000 - Expenses (35,044,712,529) (37,785,652,254) (9,861,817) - Profit for the year 1,401,589,118 1,001,207,077 (9,771,817) - Profit attributable to the 1,394,553,917 997,165,270 (9,771,817) - owners of the company Total Comprehensive income attributable to 1,394,553,917 3,684,643,333 (9,771,817) 2,279,227,589 owners of the company
The company owns 106,594,173 nos. Ordinary Shares of Tk. 10 each in BSRM Steels Limited as on 31 December 2013. This represents 31.19% of paid up capital of BSRM Steels Limited (BSL). The market price of these Ordinary shares was Tk. 68.70 per share on 31 December 2013. Fair value of investments in BSL has been estimated at Tk. 7,323,019,685.
Out of 106,594,173 nos. ordinary shares, 6,000,000 nos., 3,823,000 nos., 500,000 nos., 388,890 nos., 800,000 nos. and 2,200,000 of ordinary shares are pledged against bridge finance and term loans from United Commercial Bank Ltd., IDLC Finance Ltd., IPDC Ltd., United Leasing Company Ltd., National Housing Finance and Investments Ltd. and International Leasing and Financial Services Ltd. respectively.
31.12.2013 31.12.2012 8.02 Other investments Taka Taka Investment in non-tradable shares at cost (Note - 8.02.01) 1,000,300 1,000,300 Investment in shares of sister company, BSRM Steel Mills Ltd.-at cost - 13,500,000 Investments in Fixed Deposit Receipts (Note - 8.02.02) 98,527,494 39,159,611 99,527,794 53,659,911
8.02.01 Investment in non-tradable shares at cost Islamic Steamship Co. Ltd. 300 300 Apollo Hospital Ltd. 1,000,000 1,000,000 1,000,300 1,000,300
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31.12.2013 31.12.2012 8.02.02 Investments in Fixed Deposit Receipts Taka Taka Name of banks Purpose Period Rate of interest BASIC Bank Ltd. Security deposit 3 years 12.50% 13,146,744 11,821,792 BD Finance Ltd. Security deposit 5 years 15.00% 15,000,000 - Dhaka Bank Ltd. Investment 2 years 11.25% 683,673 614,905 IPDC of Bangladesh Ltd. Investment 2 years 12.50% 27,873,090 25,043,204 Security Deposit 5 years 12.50% 417,484 415,330 Mercantile Bank Ltd. Investment 1 year 12.50% 79,556 71,618 The City Bank Ltd. Investment 1 year 11.00% 1,326,947 1,192,762 International Leasing Investment 1 year 14.25% 20,000,000 - and Financial Services FareastLtd. Finance & Investment 1 year 13.50% 20,000,000 - Investment Ltd. 98,527,494 39,159,611 8.03 Short term investments Investment in Tradable securities at fair value (Note - 8.03.01) 15,711,449 18,506,460 Investments in Fixed Deposit Receipts (Note - 8.03.03) 62,300,303 214,101,700 78,011,752 232,608,160 8.03.01 Investment in Tradable securities at fair value ACI Zero Coupon Bond 10,785,320 14,352,968 Lafarge Surma Cement Ltd. 2,604,290 2,557,670 ACI Ltd. 1,691,676 1,135,182 Eastern Insurance Co. Ltd. 78,120 73,600 Pragati Life Insurance Ltd. 216,219 141,120 Progressive Life Insurance Ltd. 335,824 245,920 15,711,449 18,506,460 8.03.02 Fair value of tradable securities Increase/ Equivalent Closing fair (Decrease) in Cost opening fair value Fair value value reserve Tk. Tk. Tk. Tk. ACI Zero Coupon Bond 8,886,317 9,568,645 10,785,320 1,216,675 Lafarge Surma Cement Ltd. 3,101,900 2,557,670 2,604,290 46,620 ACI Ltd. 1,176,693 1,135,182 1,691,676 556,494 Eastern Insurance Co. Ltd. 179,537 73,600 78,120 4,520 Pragati Life Insurance Ltd. 319,606 141,120 216,219 75,099 Progressive Life Insurance Ltd. 497,476 245,920 335,824 89,904 14,161,529 13,722,137 15,711,449 1,989,312
8.03.03 Investments in Fixed Deposit Receipts 31.12.2013 31.12.2012 Name of banks Purpose Period Rate of interest Taka Taka AB Bank Ltd. L/C Margin 6 months 9.50% 3,838,786 - Dutch Bangla Bank Ltd. L/C Margin 6 months 11.00% 13,987,100 - Pubali Bank Ltd. L/C Margin 6 months 11.00% 1,640,508 - Standard Chartered Bank L/C Margin 6 months 10.00% 42,833,909 39,101,700 Ltd. Habib Bank Ltd. Investment 6 months 12.50% - 175,000,000 62,300,303 214,101,700
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31.12.2013 31.12.2012 9.00 Inventories Qty. (MT) Taka Taka Raw Materials-Billets 22,897 1,106,847,703 1,114,680,721 Raw Materials-Scraps 30,306 1,004,970,368 969,853,358 Finished Goods-Own production 47,464 2,690,985,208 1,325,565,778 Finished Goods-Imported 2,358 163,028,546 262,960,302 Finished Goods- Locally purchased 178 11,452,427 144,292,364 Mechanical stores 384,736,720 411,118,846 M.S. Roll 220,815,292 216,960,125 Electrical stores 135,962,464 130,200,820 General stores 35,825,377 33,731,172 Fuel and Lubricants 3,477,651 4,195,888 Consumable stores 131,483,305 148,517,349 Fire bricks - 4,324,167 5,889,585,061 4,766,400,890
9.01 Quantitative movement of raw materials and finished goods M.Ton M.Ton Raw Materials Opening stock as on January 1 47,022 64,013 Add: Imported during the year 63,485 80,133 Produced by SMW 119,289 95,810 Purchased from local market 73,939 34,774 256,713 210,717 Available for consumption 303,735 274,730 Less: Consumed /Sold/returned during the year 250,532 227,708 Closing inventories 53,203 47,022 Finished Goods Opening stock as on January 1 27,586 27,649 Add: Produced during the year 106,810 94,127 Imported/ Purchased from sister concern 42,318 97,438 176,714 219,214 Less: Sold during the year 81,280 95,935 Sale of finished goods procured from outside 45,434 95,693 126,714 191,628 Closing inventories 50,000 27,586
31.12.2013 31.12.2012 10.00 Trade Receivables Taka Taka From sale of M.S. product 404,442,274 542,712,306 From sale of scrap and billet 425,092 425,092 404,867,366 543,137,398
The management believes that above receivables are good and fully realisable. Hence, no provision has been made at this stage. 10.01 Party-wise breakup of Trade receivables Inter companies: Karnapuli Engineering Works Ltd. 6,102 1,194,000 Other customers 404,861,264 541,943,398 404,867,366 543,137,398
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31.12.2013 31.12.2012 Ageing of Trade receivables Taka Taka Due for 3 months 271,198,571 437,508,782 Due for 3 to 6 months 74,582,872 45,087,764 Due for above 6 months 59,085,923 60,540,852 404,867,366 543,137,398 Trade receivables- Classification by security and related party i) Debts considered good and in respect of which the company is fully secured 399,288,440 535,301,312 ii) Debts considered good for which the company holds no security other than the 5,578,926 7,836,086 debtors' personal security iii) Debts considered doubtful or bad - - iv) Debts due by directors or other officers of the company or debts due by firms or 6,102 1,194,000 private companies in which any director is a partner or a director or a member
v) Debts due by companies under the same management 6,102 1,194,000 vi) Maximum amount due by directors or other officers of the company at any time - - during the year
11.00 Other receivables Interest receivable 78,496,566 148,881,245 Rent receivable 95,000 - 78,591,566 148,881,245 12.00 Due from inter companies H Akberali & Co. Ltd. 1,441,905,988 843,257,266 Chittagong Power Company Ltd. 20,295,654 266,333 East Bengal Trading & Industries Corp. Ltd. 100,000 - BSRM Real Estates Ltd. 200,000 - BSRM Steel Mills Ltd. 252,410,775 68,027,565 BSRM Recycling Industries Ltd. 88,004,189 129,934,144 BSRM Logistics Ltd. 182,472,398 133,516,258 BSRM Ispat Ltd. 291,700,375 234,130,375 BSRM Metals Ltd. - 341,082 2,277,089,379 1,409,473,023 These represent short term loans given to these sister companies as and when required to meet funding requirement. All transactions were done through account payee cheque. No amount is receivable from Directors at the reporting date.
13.00 Advances and deposits Advances ( Note - 13.01) 1,575,465,864 461,673,054 Deposits ( Note - 13.02) 22,047,491 22,445,603 1,597,513,355 484,118,657 13.01 Advances: Land 17,282,327 16,462,327 Staff loan against salary 4,428,179 4,201,868 Income tax-corporate 136,306,623 161,530,248 Against revenue expenses 68,032,134 35,153,070 Against scrap purchase- others 9,132,726 27,143,375 L/C margin 25,053,501 39,722,124 Against L/C 341,665,330 111,288,545 Share money deposit to BSRM Steel Mills Ltd. (Associate) 900,000,000 - VAT current account and DEDO recoverable account 73,565,044 65,964,659 Income tax of staff - 206,838 1,575,465,864 461,673,054
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31.12.2013 31.12.2012 13.02 Deposits: Taka Taka Customs Authority against claim 1,545,145 1,545,145 Ansar & VDP 674,221 674,221 T & T and others 191,444 191,444 Power Development Board 13,917,968 13,917,968 Karnaphuli Gas Distribution Co. Ltd. (KGDCL) 1,821,023 1,808,266 Bakhrabad Gas System Ltd. 422,576 422,576 Bank guarantee to Bakhrabad Gas Systems Ltd. 549,497 1,141,767 Linde Bangladesh Ltd. 879,900 879,900 Meghna Petroleum Ltd. 40,000 40,000 Others 2,005,717 1,824,316 22,047,491 22,445,603 The directors consider that all the above advances, deposits and pre-payments are either adjustable or recoverable in cash or in kind and for that no provision against them are required at this stage.
14.00 Cash and cash equivalents Cash in hand (Note-14.01) 3,986,343 3,822,555 Cash at Banks (Note-14.02) 95,316,305 73,765,525 Fixed Deposit Receipts ( Note - 14.03) - 7,976,884 99,302,648 85,564,964
14.01 Cash in hand Corporate office 1,037,048 1,954,850 Factory office 1,893,953 800,000 Dhaka office 1,055,101 1,051,597 Overseas office 241 16,108 3,986,343 3,822,555
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31.12.2013 31.12.2012 Taka Taka 14.02 Cash at Banks: Agrani Bank Ltd., Laldighi East Br., Ctg. - CD A/C 42,195 27,576 Agrani Bank Ltd., Baizid Bostami Br., Ctg. - CD A/C 2,046,212 1,448,417 Agrani Bank Ltd., Tomson Bridge Br., Comilla -CD A/C 11,275 72,549 AB Bank Ltd., Agrabad Br., Ctg.- CD A/C 8,546,514 3,592,810 Al - Arafah Islami Bank Ltd., Agrabad Br., Ctg. - CD A/C 916,245 65,123 Bank Al-Falah Ltd., Agrabad Br., Ctg. - CD A/C 11,724 37,335 Bank Al-Falah Ltd., Agrabad Br., Ctg. - STD A/C 21,752 23,022 BASIC Bank Ltd., Dewanhat Br., Ctg. - CD A/C 52,806 48,588 Commercial Bank of Ceylon, Agrabad Br., Ctg.- CD A/C 14,090 33,740 EXIM Bank Ltd., CDA Avenue Br., Ctg.- CD A/C 641,530 4,418,618 Dhaka Bank Ltd., Jubilee Road Br., Ctg.- CD A/C 6,276 30,439 Dutch Bangla Bank Ltd., Agrabad Br., Ctg. - CD A/C 45,628 7,767 Dutch Bangla Bank Ltd., Jubilee Road Br.,Ctg. - CD A/C 25,334,452 293,119 Habib Bank Ltd., Laldighi East Br., Ctg. - CD A/C 6,881,725 30,801,785 HSBC Ltd., Agrabad Br. Ctg.- CD A/C 3,744,901 45,578,456 HSBC Ltd. Kolkata 109,310 19,828 HSBC Ltd.,- Agrabad Br., - USD Exporters FCY A/C 149,942 7,407 IFIC Bank Ltd., Agrabad - CD A/C 375,563 - Indian Overseas Bank Ltd. (A/C No 817) 1,802 1,802 Islami Bank Bangladesh Ltd., Jubilee Road Br., Ctg. - CD A/C 4,060 761,558 Jamuna Bank Ltd., Khatungonj Br., Ctg. - CD A/C 82,537 2,166,408 Janata Bank Ltd., Laldighi East Corporate Br., Ctg. - CD A/C 1,485,767 129,629 Janata Bank Ltd. , Laldighi East Br., Ctg. - CD A/C (Old) 1,008 1,008 Janata Bank Ltd. Agrabad Br., Ctg - CD A/C 761 761 Janata Bank Ltd., Local office, Dhaka CD A/C 1,977 3,127 Mercantile Bank Ltd., Jubilee Road Br., Ctg. - CD A/C 12,135 24,404 Mutual Trust Bank Ltd., Jubilee Road Br., Ctg. - CD A/C 850,951 2,777,964 National Bank Ltd., Jubilee Road Br. Ctg. - CD A/C 74,833 38,502 National Credit and Commerce Bank Ltd., Agrabad Br. Ctg. - CD A/C 47,317,362 48,039 NRB Commercial Bank Ltd. 3,816 - One Bank Limited., Agrabad Br. Ctg. - CD A/C 7,532 30,014 Prime Bank Ltd., O. R. Nizam Road Br.,Ctg. - CD A/C 4,459,483 204,289 Premier Bank Ltd., O. R. Nizam Road Br., Ctg. - CD A/C 20,605 1,995 Premier Bank Ltd., Khatungonj Br., Ctg. - CD A/C 11,531 69,880 Pubali Bank Ltd., Agrabad Br. Ctg. - CD A/C 33,764 90,279 Shahjalal Islami Bank Ltd., Jubilee Road Br., Ctg. - CD A/C 89,363 199,612 Social Islami Bank Ltd., Jubilee Road Br., Ctg. - CD A/C 384,974 485,015 Sonali Bank Ltd., Kalibari Br., Ctg. - CD A/C 7,526 84,503 Sonali Bank Ltd., Kalibari Br., Ctg. - STD A/C - 71,514 Sonali Bank Ltd., Cable Shilpa Br., Khulna - CD A/C 512 3,789 Southeast Bank Ltd., CDA Avenue Br., Ctg. - CD A/C 2,672,422 3,564,286 Southeast Bank Ltd. , Pahartali Br., Ctg. - CD A/C 1,016,782 82,502 Standard Bank Ltd., Sadarghat Br., Ctg.- CD A/C 2,576,986 - Standard Chartered Bank Ltd., Agrabad Br., Ctg.- CD A/C (17,656,904) (32,939,762) Standard Chartered Bank Ltd., Motijheel Br., Dhaka- CD A/C 134,745 206,993 State Bank of India,Agrabad Br., Ctg. - CD A/C 10,382 2,172,785 Trust Bank Ltd., CDA Avenue Br., Ctg. - CD A/C 131,852 132,791 The City Bank Ltd., Agrabad Br., Ctg. - CD A/C 368,029 23,983 United Commercial Bank Ltd., Jubilee Road Br. Ctg. - CD A/C 2,257,572 6,821,276 95,316,305 73,765,525
All bank balances are reconciled with bank statements and negative balances shown in the bank book represent book overdraft.
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31.12.2013 31.12.2012 14.03 Fixed Deposit Receipts Taka Taka Name of banks Purpose Period Rate of interest
AB Bank Ltd. L/C Margin 1 month 12.00% - 3,464,370 Pubali Bank Ltd. L/C Margin 3 months 12.50% - 4,512,514 - 7,976,884
15.00 Share capital Authorised capital: 500,000,000 Ordinary Shares of Tk. 10 each 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 Issued, Subscribed and Paid-up capital: 64,345,491 Ordinary Shares of Tk.10/- each issued in cash 643,454,910 643,454,910 64,345,491 Ordinary Shares of Tk.10/- each 643,454,910 643,454,910 fully paid-up as Bonus Shares 27,160,056 Ordinary shares of Tk. 10/- each 271,600,560 271,600,560 fully paid up (other than cash) 1,558,510,380 1,558,510,380
15.01 Shareholding position Number of Name of shareholders % Number of shares shares Mr. Alihussain Akberali 14.09% 21,967,130 21,967,130 Mr. Aameir Alihussain 10.95% 17,069,955 17,069,955 Mrs. Bilkis Alihussain 10.36% 16,143,581 16,322,540 Mr. Saifuddin Abbas Unwala 5.39% 8,399,000 9,400,000 Mr. Iqbal Hussain 6.97% 10,870,000 10,870,000 Mr. Abbas Jumani 6.42% 10,000,000 10,000,000 Mr. Ali Asgar Badruddin 12.83% 20,000,000 20,000,000 Mr. Zohair Taherali 3.65% 5,682,204 5,682,204 Mrs. Tehseen Zohair Taherali 3.94% 6,147,822 6,188,663 VORTEX Investments Ltd. 2.34% 3,645,890 3,645,890 Mrs. Sabeen Aameir 2.57% 4,004,600 4,004,600 Mr. Abdul Qadir Zohair 0.00% 4,600 4,600 Mrs. Munira Saif Uddin 0.01% 13,880 13,880 Mr. Md. Hussain Habib 0.00% 4,650 4,650 Mr. Faisal Iqbal Poonawala 0.00% 4,520 4,520 Mrs. Shahnaz Hussain 0.02% 35,840 35,840 H. Akberali & Co. Ltd. 16.86% 26,270,116 26,270,116 Karnafully Engineering Works Ltd. 2.57% 4,000,850 4,000,850 Mrs. Rizwana Khandwala 0.06% 101,000 - Mrs. Fatema Jangbarwala 0.16% 245,000 - Mr. Yusuf Nosir Jangbarwala & Batul Alibhoy Tyebkhan 0.58% 900,000 - Mr. Aquil Hatim Bhai 0.00% - 20,000 Various employees of BSRM Group 0.22% 340,400 345,600 100% 155,851,038 155,851,038
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15.02 Dividends 31.12.2013 31.12.2012 The following dividends were declared and paid/ payable by the company for the Taka Taka year: 15% Cash dividend (Tk. 1.5) per qualifying ordinary share (for 2012) 233,776,557 - 100% Stock dividend per qualifying ordinary share (for 2011) - 643,454,910 233,776,557 643,454,910 During the year 2013, Tk. 67,778,860 was remitted to non-resident shareholders as dividend after making required deduction of tax at source.
After the reporting date, the following dividends were proposed by the Board of directors.
15% Cash dividend (Tk. 1.5) per qualifying ordinary share - 233,776,557
16.00 Reserves 16.01 General reserve The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes and to meet future known or unknown requirements. There is no policy of regular transfer. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss. 16.02 Revaluation reserve Revaluation reserve relates to the revaluation of property plant and equipment (Note- 3.01.04).
16.03 Fair value reserve The fair value reserve comprises the cumulative net change in the fair value of available for sale financial assets until the assets derecognised or impaired (Note-3.21.01). 16.04 Reserve for issuance of share against merger This represents total face value of shares issued against acquisition of assets and liabilities of Meghana Engineering Works Ltd. as on December 31, 2010. As per calculation 27,160,056 nos Ordinary Shares of Tk. 10 each totaling Tk. 271,600,560 of Bangladesh Steel Re-Rolling Mills Ltd. has been allotted subsequently after getting approval from Securities and Exchange Commission (SEC) vide letter of consent (ref: SEC/CI/CPLC-213/2009/1582) dated September 30, 2012.
The procedure for transferring the legal title of all movable and immovable properties of Meghna Engineering Works Limited due to acquisition is under process. However, physical possession of movable and immovable properties of Meghna Engineering Works Limited continues to remain with the reporting Entity.
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31.12.2013 31.12.2012 17.00 Long Term Loan Taka Taka Project loan and syndicated term loan(Note- 17.03) 592,804,276 627,490,645 Other Term loan (Note- 17.04) 1,306,077,892 917,675,859 1,898,882,168 1,545,166,504
17.01 Long term loan -Maturity analysis Long term loans received from Banks and financial institutions are re-payable as per the following schedule from April, 2013:
Due within one year-Current portion 492,699,556 316,932,594 Due after more than one year-Long term portion 1,406,182,612 1,228,233,910 1,898,882,168 1,545,166,504
17.02 Long Term Loan- Long term portion Agrani Bank Ltd. - Project loan - 9,594,631 One Bank Ltd. - Syndicated term loan 492,616,797 579,796,228 Other term loan 913,565,815 638,843,051 1,406,182,612 1,228,233,910
17.03 Project loan and syndicated term loan Agrani Bank Ltd. - Project loan (Note - 17.03.01) 10,820,974 27,490,645 One Bank Ltd. - Syndicated term loan ( Note - 17.03.02) 581,983,302 600,000,000 592,804,276 627,490,645 17.03.01 Terms of project loan Lenders: Agrani Bank Ltd. sanctioned an amount of Tk. 1,119.36 lac as project loan against BMRE and disbursed the full amount within 2nd November, 2005. Total loan amount was divided into two parts as long term loan Tk. 1,008.43 lac and interest during implementation Tk. 110.93 lac.
Total loan facilities: Tk. 1,119.36 lac. Interest rate: Interest rate is 12% per annum or at applicable rate as determined from time to time on half yearly basis. Disbursement: The first disbursement was made on 18.12.2004. Repayments Long term loan is being re-paid in 16 half-yearly equal installments starting from 18 June 2007. Interest for the period of implementation is being re-paid in five equal yearly installments commencing from completion of one year from the commencement of the commercial production of the project. Loan period The entire loan amount shall be re-paid by ten (10) years including grace period of two (2) years. Securities: i. Mortgage of land area of 1.98 acre and building thereon. ii. Hypothecation on all existing and proposed machineries and furniture of the project. iii. Personal guarantee of all directors of the company. Lender's covenants Any subsequent requirement of working capital for BMRE Project shall be financed by entrepreneurs. Purpose: For meeting expenditure for capital machineries.
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17.03.02 Terms of Syndicated term loan Lenders: The company entered into a syndicated loan agreement for BMRE on May 15, 2012 with One Bank Limited, the lead arranger and 6 (Six) other Banks and Financial Institutions. Total loan facilities: Tk. 60 crore. Interest rate: Interest rate is 15%-16% per annum calculated on quarterly basis and variable depending on the situation of money market. Disbursement: The first disbursement was made on September 16, 2012. Repayments This term loan is repayable in 60 (sixty) monthly installments after 1 (one) year of grace period. Securities: i. Registered Mortgage on 827 decimals of land at Sitakunda, Chittagong along with building and structures constructed or to be constructed thereon on first ranking parri passu basis. ii. Fixed and floating charge over assets. iii. Irrevocable general power of attorney. iv. Demand promissory note covering full amount. Purpose: For acquisition of plant and machineries to enhance the production capacity to 450,000 metric tons per year, improve product quality, undertake civil construction etc. for BMRE. 31.12.2013 31.12.2012 17.04 Other Term Loan Taka Taka AB Bank Ltd. 32,997,605 68,998,756 IPDC of Bangladesh Ltd. 17,429,105 48,233,275 IDLC Finance Ltd. 140,679,742 11,678,075 Jamuna Bank Ltd. 23,151,941 46,522,139 Lanka Bangla Finance Ltd. 459,350,025 500,000,000 MIDAS Financing Ltd. 18,748,307 56,244,923 Fareast Finance & Investment Ltd. 186,880,733 - International Leasing and Financial Services Ltd. 250,000,000 - National Housing Finance and Investments Ltd. 94,855,836 - Prime Bank Ltd. 24,480,137 63,735,691 United Leasing Company Ltd. 57,504,461 67,724,019 National Credit and Commerce Bank Ltd. - 16,533,718 Shahjalal Islami Bank Ltd. - 26,118,902 United Commercial Bank Ltd. - 11,886,361 1,306,077,892 917,675,859 Terms and conditions of above term loans are shown in Note-17.04.01 below:
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17.04.01 Terms and conditions of other term loan Amount Types of Rate of Name of banks Installment Securities Taka facility interest 1. Lien on 189,000 nos. ordinary shares of BSRM Wires Ltd. AB Bank Ltd. 32,997,605 Term loan Monthly 14.50% 2. Lien on 105,000 nos. ordinary shares of BSRM Recycling Ind. Ltd. 3. Corporate guarantee of BSRM Wires Ltd. and BSRM Recycling Ind. Ltd. 1. Lien on FDR amounting to 10% of financed amount. 2. Charge on fixed & floating assets of the company. Fareast Finance & Investment 186,880,733 Term loan Monthly 17.00% 3. Directors' personal guarantee and Mrs. Bilkis Ali Hussain (shareholder). Ltd. 4. Corporate guarantee of H Akberali & Co. Ltd. 5. Post dated cheques. 1. Directors' personal guarantee. IPDC of Bangladesh Ltd. 17,429,105 Term loan Quarterly 16.00% 2. Floating charge over all movable properties of BSRM Ltd. 3. Lien on 808,500 ordinary shares held by all directors in BSRM Ltd. 1. Lien on 382,300 nos. ordinary shares of BSRM Steels Ltd. IDLC Finance Ltd. 140,679,742 Term loan Monthly 17.00% 2. Directors' personal guarantee. 1. Directors' personal guarantee. International Leasing and 250,000,000 Term loan Monthly 17.00% 2. Lien on TDR of Tk. 2 crore. Financial Services Ltd. 3. Lien on 2,200,000 nos. of shares of BSRM Steels Ltd. 1. Directors' personal guarantee. Jamuna Bank Ltd. 23,151,941 Term loan Monthly 16.00% 2. Hypothecation of capital machineries. 1. Directors' personal guarantee. 2. Corporate guarantee of H. Akber Ali & Co. and BSRM Iron & Steel Company Ltd. Lanka Bangla Finance Ltd. 459,350,025 Term loan Monthly 17.00% 3. Floating charge on the fixed and floating assets of BSRM Ltd. 4. Post dated cheques, promissory note etc. MIDAS Financing Ltd. 18,748,307 Term loan Monthly 18.00% Directors' personal guarantee. National Credit and Commerce 1. Directors' personal guarantee. - Term loan Monthly 15.50% Bank Ltd. 2. Hypothecation of capital machineries. National Housing Finance and 1. Directors' personal guarantee. 94,855,836 Term loan Monthly 17.00% Investments Ltd. 2. Lien on 800,000 nos. ordinary shares of BSRM Steels Ltd. 1. Directors' personal guarantee. Prime Bank Ltd. 24,480,137 Term loan Monthly 16.00% 2. Hypothecation of capital machineries. 1. Directors' personal guarantee. Shahjalal Islami Bank Ltd. - Term loan Monthly 16.00% 2. Hypothecation of capital machineries. 1. Directors' personal guarantee. United Commercial Bank Ltd. - Term loan Quarterly 17.00% 2. Hypothecation of capital machineries. 1. Directors' personal guarantee. United Leasing Company Ltd. 57,504,461 Term loan Monthly 16.50% 2. Lien on 388,889 nos. ordinary shares of BSRM Steels Ltd. 3. Post dated cheque covering whole of the loan amount plus interest. 1,306,077,892
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31.12.2013 31.12.2012 18.00 Deferred tax liabilities Taka Taka Opening balance as on January 1 882,458,633 682,920,590 Provided during the period: Investments in associates 171,455,321 44,521,271 Increases in fair value of tradable securities 232,488 - Revaluation surplus of PPE (excluding land) - 212,067,263 Taxable temporary difference of PPE (excluding land) 53,931,562 -
Adjusted during the period: Deductible temporary difference of PPE - (10,421,460) Sale of revalued assets (5,012,482) (1,845,118) Loss on revaluation of PPE - (10,508,763) Impact of depreciation on revaluation surplus (31,077,847) (34,275,150) 189,529,042 199,538,043 Closing balance 1,071,987,675 882,458,633
18.01 Reconciliation of deferred tax liabilities/ (assets) Taxable/ Carrying Tax Deferred tax Tax base (Deductible) amount rate liabilities/ (assets) temporary difference Taka Taka Taka Taka Property, plant & equipment (except 3,232,887,537 1,021,386,196 37.5% 2,211,501,341 829,313,002 land) Tradable securities 15,711,449 14,161,529 15% 1,549,920 232,488 Deferred tax liability on investment in associates 242,442,185 Total deferred tax liabilities 1,071,987,675
19.00 Trade payables BSRM Steels Ltd. 3,563,424,229 2,775,603,565 Purchase from outsiders - 5,368,952 BSRM Wires Ltd. - 962,800 3,563,424,229 2,781,935,317
20.00 Short term liabilities Loan against Trust Receipt (LTR) (Note - 20.01) 1,089,112,721 886,787,515 Bridge Loan from United Commercial Bank Ltd. 530,390,716 518,929,379 Time Loan from AB Bank Ltd. 149,108,293 11,700,000 Time Loan from Habib Bank Ltd. 100,069,444 - Time Loan from One Bank Ltd. 118,327,083 - Factoring Loan against sales invoice (Note - 20.02) 4,783,360 14,047,257 Loan against CC Pledge and Hypo (Note - 20.03) 1,125,898,695 1,219,739,906 Inland Foreign Documentary Bills For Collection (IFDBC) (Note-20.04) 513,337,980 598,311,309 Time Loan from Trust Bank Ltd. - 101,526,944 3,631,028,292 3,351,042,310
Terms and conditions of the above liabilities are shown in Note-47.
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31.12.2013 31.12.2012 20.01 Loan against Trust Receipt (LTR) Taka Taka Bank Alfalah Ltd. 56,759,955 54,374,199 HSBC Ltd. 284,156,436 299,813,278 Islami Bank Bangladesh Ltd. 259,669,880 95,432,087 Mercantile Bank Ltd. 5,718,856 1,491,146 Prime Bank Ltd. 30,343,731 191,812,878 Pubali Bank Ltd. 185,157,587 12,757,108 Standard Chartered Bank Ltd. 105,367,500 79,420,256 Shahjalal Islami Bank Ltd. 74,530,100 93,993,380 Trust Bank Ltd. 2,959,142 57,693,183 Al-Arafah Islami Bank Ltd. 2,929,367 - Dutch Bangla Bank Ltd. 13,500,292 - National Credit and Commerce Bank Ltd. 34,860,893 - One Bank Ltd. 33,158,982 - 1,089,112,721 886,787,515
20.02 Details of Factoring Loan United Leasing Co. Ltd. (Note - 20.02.01) 4,783,360 14,047,257 4,783,360 14,047,257 20.02.01 Terms and conditions: i. 80% of gross sales invoice/billed amount is paid by discounting sales invoice. ii. Interest rate is 15% per annum along with processing and collection fees of 0.25% on the invoice amount. Security: Personal guarantee of directors of the company and deed of floating charge on all accounts receivables (present and future). 20.03 Loan against CC Pledge, Hypo and Overdraft
Agrani Bank Ltd. - CC (Hypo) A/C 68,964,095 134,306,511 Agrani Bank Ltd., Laldighi East Br. Ctg. - CC (Pledge) A/C 431,152,637 429,049,469 BASIC Bank Ltd. - OD A/C 187,260 11,665,249 Habib Bank Ltd., Laldighi Br. Ctg. - CC A/C 65,164,544 45,143,157 Jamuna Bank Ltd. - CC (Hypo) A/C 32,424,325 18,589,514 National Bank Ltd. - CC A/C (Hypo) 16,516,222 47,826,506 Prime Bank Ltd. - CC (Hypo) A/C 141,094,424 139,931,200 Pubali Bank Ltd., Agrabad Br., Ctg. - CC (Hypo) 69,779,967 249,261,212 Sonali Bank Ltd., K.C. Dey Road Br. Ctg.- CC (Hypo) A/C 79,718,714 67,438,402 Sonali Bank Ltd., Kalibari Br. Ctg.- CC (Hypo) A/C 5,818,357 16,169,091 Trust Bank Ltd. - OD A/C 14,309,721 44,988,794 Standard Bank Ltd. - CC (Hypo) A/C 200,768,429 - Dhaka Bank Ltd. - 9,726,887 Shahjalal Islami Bank Ltd. - 2,001,889 Social Islami Bank Ltd. - (CC Hypo) A/C - 3,642,025 1,125,898,695 1,219,739,906
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31.12.2013 31.12.2012 20.04 Inland Foreign Documentary Bills For Collection (IFDBC) Taka Taka HSBC Ltd. 23,660,107 62,597,982 Shahjalal Islami Bank Ltd. 10,444,473 39,207,622 One Bank Limited. 27,804,729 37,345,038 Pubali Bank Ltd. 32,080,348 117,264,979 Islami Bank Bangladesh Ltd. 58,243,226 26,272,490 Prime Bank Ltd. 42,758,175 73,299,153 IFIC Bank Ltd. 71,158,984 - United Commercial Bank Ltd. 23,379,408 - Standard Chartered Bank Ltd. 31,656,333 - Dhaka Bank Ltd. 31,999,946 - Dutch Bangla Bank Ltd. 160,152,251 - AB Bank Ltd. - 37,346,870 Mercantile Bank Ltd. - 66,549,086 State Bank of India - 85,634,731 National Bank Ltd. - 33,796,086 Agrani Bank Ltd. - 18,997,272 513,337,980 598,311,309 21.00 Liabilities for expenses Audit Fees 360,000 360,000 Karnaphuli Gas Distribution Co. Ltd. 2,079,848 2,451,150 Power Development Board for electricity (Factory) 133,947,055 49,550,779 Godown rent 133,050 113,100 C & F Bill and others 8,294,817 3,594,131 Others 120,102 185,836 Carriage on sales 4,167,277 10,031,868 Salary & Allowances 23,046,708 21,283,046 Financial expenses 39,584,169 15,965,289 Linde Bangladesh Ltd. (formerly BOC) 317,090 293,320 Telephone expenses 191,097 75,279 Carrying charges 1,339,378 2,857,154 Medical expenses 782,928 277,859 Conveyance 14,400 91,029 Casual wages 1,863,868 1,670,595 Fees and renewals 614,250 - Power Development Board for electricity (Depot, godown etc.) - 158,650 Guest House rent - 40,100 ULC Bill Collection charges and interest - 208,613 Printing and stationery - 3,060 Postage and telegram - 93,180 Legal expenses - 24,000 Fuel and lubricants - 16,644 Spare parts - 7,518,570 Carriage on purchase - 178,086 Repair and maintenance - 72,500 Entertainment expenses - 28,459 216,856,037 117,142,297
22.00 Advance against sales 101,714,671 54,956,861
These represent advances received from different parties against sale of finished goods. Goods have not been delivered to them within the reporting date.
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31.12.2013 31.12.2012 23.00 Due to inter companies Taka Taka Karnaphuli Engineering Works Ltd. 6,000,000 - BSRM Metals Ltd. 988,918 - Section Steel Ind. Ltd. 550,000 - BSRM Wires Ltd. 12,811,318 6,949,912 BSRM Steels Ltd. 2,375,947,711 362,970,206 Bangladesh Steels Ltd. 4,912,398 4,498 2,401,210,345 369,924,616
These balances represent short term financial arrangement availed from inter companies as and when required to meet working capital. Interest @ 15.50% has been charged to these balances. All transactions were made through account payee cheques. 24.00 Provision for income tax Opening balance as on January 1 184,962,166 256,237,264 Provided during the period: Against current year 124,274,416 188,224,809 Against previous years 6,612,039 87,652 130,886,455 188,312,461 315,848,621 444,549,725 Less: Adjusted with advance income tax paid at source 191,574,205 259,587,559 Closing balance 124,274,416 184,962,166
Year wise Income Tax assessment status is as follows: Accounting Assessment year Present status year Assessment of Meghna Engineering Works 2008 2009-2010 Ltd. is pending at High Court Division 2009 2010-2011 Assessment completed 2010 2011-2012 Assessment completed 2011 2012-2013 Assessment completed 2012 2013-2014 Assessment completed
25.00 Provision for WPPF and Welfare Fund Opening balance as on January 1 2,665,273 16,775,066 Provided during the period 2,199,136 10,673,907 4,864,409 27,448,973 Less: Paid during the period with salary 4,058,024 24,783,700 Closing balance 806,385 2,665,273
26.00 Other liabilities Liability for other finance 150,000 150,000 Earnest Money 50,000 50,000 Security Deposit 953,762 8,598,448 Retention Money 7,744,989 11,787,273 Income Tax deducted at source from salary 1,124,335 - Income Tax deducted at source-others 2,564,198 1,162,918 VAT deducted at source 1,267,268 843,340 Dividend payable 1,351,360 - Employees' Provident Fund - 1,214,991 15,205,912 23,806,970
Income Tax and VAT deducted at source above have subsequently been paid to the Govt. Exchequer.
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2013 2012 27.00 Revenue Taka Taka Local sales 8,341,552,985 12,977,678,436 Export sales (Note-27.01) 48,263,134 52,132,524 Sale of scrap 116,370,841 977,371,266 Sale of by-products 96,228,048 36,239,262 8,602,415,008 14,043,421,488 27.01 Export sales Total export sales during this period was USD 623,364 against exporting of 797.87 MT goods. 28.00 Cost of sales Cost of sales-own production (Note -28.01) 5,145,347,011 5,129,813,667 Cost of sales- finished goods purchased (Note - 28.02) 2,863,475,160 6,287,904,038 Cost of sale of scrap 93,500,567 964,002,867 Cost of sale of billet - 964,180,241 8,102,322,738 13,345,900,813 28.01 Cost of sales-own production Opening Stock of raw materials - Billets 1,114,680,721 647,034,794 Add: Purchased during the year 95,301,103 1,015,550,886 Consumption of scrap and sponge(Note - 28.01.01) 4,642,847,703 4,107,685,663 4,738,148,806 5,123,236,549 5,852,829,527 5,770,271,343 Less: Closing Stock of Raw Materials 1,106,847,703 1,114,680,721 Cost of sale of billets to other parties - 964,180,241 1,106,847,703 2,078,860,962 Raw Materials Consumed- Billets 4,745,981,824 3,691,410,381 Add: Manufacturing Expenses: Direct expenses 74,550,985 71,340,455 Direct materials consumed 397,762,542 346,836,823 Factory overhead (Note - 28.03) 272,038,973 193,232,774 Power 596,745,125 418,907,137 Gas 27,641,127 27,224,671 Welding gas and liquid oxygen 3,186,939 2,998,402 Fuel and Lubricants 14,947,651 8,865,584 Repair and maintenance of furnace - 3,578,410 Consumption of mechanical stores 48,276,631 35,244,681 Consumption of MS Roll 35,896,526 26,551,305 Consumption electrical stores 18,854,670 9,143,057 Consumption general stores 6,850,395 2,236,385 Depreciation (Note- 6.00) 268,033,053 237,073,737 1,764,784,617 1,383,233,421 Cost of Goods Manufactured 6,510,766,441 5,074,643,802 Add: Opening stock of Finished Goods 1,325,565,778 1,380,735,643 7,836,332,219 6,455,379,445 Less: Closing stock of Finished Goods 2,690,985,208 1,325,565,778 Cost of sales of manufactured finished goods 5,145,347,011 5,129,813,667 28.01.01 Raw materials consumed - scrap and sponge Opening Stock of raw materials 969,853,358 2,078,684,887 Add: Purchased during the year 4,771,465,280 3,962,857,001 5,741,318,638 6,041,541,888 Less: Closing Stock of raw materials 1,004,970,368 969,853,358 Cost of sale of scrap 93,500,567 964,002,867 1,098,470,935 1,933,856,225 4,642,847,703 4,107,685,663 Page | 110
2013 2012 Taka Taka 28.02 Cost of sales-finished goods imported and locally purchased Opening stock of finished goods 407,252,666 260,086,164 Add: Finished goods imported 205,308,252 471,037,694 Finished goods locally purchased 2,425,395,215 5,964,032,846 3,037,956,133 6,695,156,704 Less: Closing stock of finished goods 174,480,973 407,252,666 2,863,475,160 6,287,904,038
28.03 Factory overhead Salaries and allowances 198,010,034 124,444,584 Godown rent 7,612,770 6,926,640 Carrying charges-raw materials 27,057,387 23,806,656 Conveyance expenses 9,686,277 3,263,754 Electricity expenses 4,250,526 5,188,471 Water bill-WASA 54,423 75,432 Entertainment 4,793,322 3,625,007 Travelling expenses 2,083,810 965,640 Factory office expenses 1,206,035 706,680 General expenses 474,917 133,960 Guest house rent 1,523,280 811,550 Guest house expenses 867,285 548,807 Insurance expenses 581,561 359,281 Medical expenses 1,960,488 907,582 Paper and periodical 10,515 12,984 Postage and telegram 133,374 62,253 Printing & stationery 814,829 1,115,411 Repairs and Maintenance 10,319,174 17,159,462 Land revenue, Municipal tax 548,766 554,815 Generator expenses 50,200 2,563,805 272,038,973 193,232,774
29.00 Selling and distribution costs Advertisement 307,294 450,826 Brokerage and commission 50,000 66,233 Carriage on sales 50,934,483 25,654,496 Travelling expenses 2,361,021 3,308,978 Export charges 663,769 1,384,108 Debtors written off 420,791 - Sales commission 360,255 3,760,676 Godown rent 548,898 789,654 55,646,511 35,414,971
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2013 2012 30.00 Administrative costs Taka Taka Salaries and allowances 99,421,290 79,383,945 Directors' remuneration (Note - 30.01) 24,600,000 24,600,000 Rent (Office, depot and others) 5,420,040 21,182,096 Fees and renewals 3,175,453 1,481,043 Land revenue, Municipal tax 1,125 195,054 Audit fees 790,525 868,300 Conveyance expenses . 1,449,423 658,312 Donation and subscriptions 562,336 1,951,932 Entertainment 2,929,564 3,145,402 General expenses 217,293 246,661 Guest house expenses 132,660 180,000 Legal expenses 909,536 1,478,482 Professional expenses 1,457,440 2,765,762 Motor vehicle expenses 5,839,805 12,261,500 Office expenses 1,555,343 1,961,172 Postage expenses 463,909 650,737 Computer expenses 7,653 1,295,587 Printing expenses 38,133 296,278 Stationery expenses 43,837 667,369 Laboratory expenses and others 72,506 29,376 Paper and Periodicals 34,548 48,265 Telephone and e-mail expenses 3,245,429 3,937,930 Training expenses 254,261 200,957 Depreciation (Note- 6.00) 11,105,132 10,712,097 Electricity expenses 1,287,276 986,609 Medical expenses 1,094,891 2,112,421 Staff welfare - 32,434 Travelling expenses - 2,701,173 166,109,408 176,030,894
30.01 Directors' Remuneration Details of Directors' remuneration paid during the year are as follows: Gross Income Tax Name Net Paid Remuneration Deducted Taka Taka Taka Mr. Alihussain Akberali-Managing Director 7,200,000 1,800,000 5,400,000 Mr. Aameir Alihussain-Director 4,800,000 1,200,000 3,600,000 Mr. Zohair Taherali-Director 7,200,000 1,800,000 5,400,000 Mrs. Tehseen Zohair Taherali-Director 4,800,000 1,200,000 3,600,000 Mrs. Sabeen Aameir- Director 600,000 49,500 550,500 24,600,000 6,049,500 18,550,500
In addition to remuneration, Directors avail company vehicles for transportation purposes.
31.00 Other Income Profit/(Loss) on sale of motor car 827,295 (610,131) Profit on sale of machinery 2,951,567 - Miscellaneous income 2,873,362 744,862 Loss on sale of office equipment - (26,500) 6,652,224 108,231
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2013 2012 Taka Taka 32.00 Finance costs Interest on LTR 158,815,914 104,499,441 Interest on Demand and Time loan 14,358,440 4,959,270 Interest on factoring loan 1,467,553 1,358,644 Interest on Term loan 206,137,552 111,582,128 Bank charges 6,755,340 7,412,237 Bank Guarantee Commission 130,774 14,530 Interest on balance due to inter companies-Net (279,203,494) (108,536,263) Interest on Overdraft 166,931,728 158,011,447 Foreign currency exchange rate fluctuation gain (10,997,401) (2,040,989) Interest on BMRE Term loan - 1,571,885 264,396,406 278,832,330
33.00 Finance income Interest income from FDR 23,390,549 34,150,796 23,390,549 34,150,796
34.00 Non- operating income Dividend income 70,482 56,800 Management fees 163,550,409 99,159,222 Profit on sale of investment in shares 1,482,841 50,034,684 Rental income 3,960,000 1,940,000 Impairment loss on investment in tradable shares - (1,121,720) 169,063,732 150,068,986
35.00 Share of profit of associate (Net of Total BSL BSML BSL tax) 2013 2012 Net profit attributable to the shareholders of associates (9,771,817) 1,394,553,917 997,165,270
Ownership 21.76% 31.19% 31.19%
Net (loss)/profit attributable to BSRM Ltd. (1,543,996) * 434,939,131 433,395,135 310,999,948 Excess of proportionate net asset value of associates over acquisition 498,898,726 - 498,898,726 - cost Adjustment against unrealized profit - 1,833,774 1,833,774 1,954,530 on inventories-net 497,354,730 436,772,905 934,127,635 312,954,478 * Share of loss from BSML has been calculated from the day it has become an associate i.e., 11 April 2013. 36.00 Basic earnings per share (EPS) Profit attributable to the ordinary shareholders (Taka) 788,701,611 453,924,187
Weighted Average number of shares outstanding during the year (Nos.) 155,851,038 155,851,038 Basic earnings per share (EPS)-Taka 5.06 2.91
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37.00 Related party transactions During the year, the company carried out a number of transactions with related parties in the normal course of business and on arms length basis. The name of these related parties, nature of transactions, their total value and balances on reporting date have been set in accordance with the provisions of BAS-24. Related parties comprise of companies under common ownership and common management control. Nature of Outstanding as Name of parties Relationship Compensation Transactions on 31.12.2013 Taka Sister Company H Akberali & Co. Ltd. Short term loan 1,441,905,988 Dr. Market price and shareholder
Karnaphuli Engineering Works Ltd. -DO- Short term loan 6,000,000 Cr. Market price Chittagong Power Company Ltd. Sister Company Short term loan 20,295,654 Dr. Market price BSRM Wires Ltd. -DO- Short term loan 12,811,318 Cr. Market price BSRM Recycling Industries Ltd. -DO- Short term loan 88,004,189 Dr. Market price Bangladesh Steels Ltd. -DO- Short term loan 4,912,398 Cr. Market price BSRM Logistics Ltd. -DO- Short term loan 182,472,398 Dr. Market price BSRM Ispat Ltd. -DO- Short term loan 291,700,375 Dr. Market price BSRM Real Estates Ltd. -DO- Short term loan 200,000 Dr. Market price BSRM Metals Ltd. -DO- Short term loan 988,918 Cr. Market price Section Steel Ind. Ltd. -DO- Short term loan 550,000 Cr. Market price East Bengal Trading & Industries -DO- Short term loan 100,000 Dr. Market price Corp. Ltd. BSRM Steels Ltd. Investee Short term loan 2,375,947,711 Cr. Market price BSRM Steel Mills Ltd. Investee Short term loan 252,410,775 Dr. Market price BSRM Steels Ltd. Investee Purchase 3,563,424,229 Cr. Market price Karnaphuli Engineering Works Ltd. -DO- Sales 6,102 Dr. Market price
37.01 Details of transactions Opening Provided during Adjusted during Closing Name of inter companies balances the year the year balances Taka Taka Taka Taka H Akberali & Co. Ltd. 843,257,266 Dr. 1,102,192,149 503,543,427 1,441,905,988 Dr. Karnaphuli Engineering Works Ltd. - 7,611,060 1,611,060 6,000,000 Cr. Chittagong Power Company Ltd. 266,333 Dr. 20,928,821 899,500 20,295,654 Dr. BSRM Wires Ltd. 6,949,912 Cr. 99,444,506 93,583,100 12,811,318 Cr. BSRM Recycling Industries Ltd. 129,934,144 Dr. 91,429,164 133,359,119 88,004,189 Dr. BSRM Iron & Steel Co. Ltd. - 3,824,310,335 3,824,310,335 - Bangladesh Steels Ltd. 4,498 Cr. 4,907,900 4,912,398 Cr. BSRM Logistics Ltd. 133,516,258 Dr. 111,668,611 62,712,471 182,472,398 Dr. BSRM Ispat Ltd. 234,130,375 Dr. 63,820,000 6,250,000 291,700,375 Dr. BSRM Real Estates Ltd. - 200,000 200,000 Dr. Section Steel Ind. Ltd. 600,000.00 50,000 550,000 Cr. BSRM Metals Ltd. 341,082 Dr. 720,000 2,050,000 988,918 Cr. East Bengal Trading & Industries - 650,000 550,000 100,000 Dr. Corp. Ltd. BSRM Steels Ltd. 362,970,206 Cr. 12,879,736,472 10,866,758,967 2,375,947,711 Cr. BSRM Steel Mills Ltd. 68,027,565 Dr. 2,202,787,983 2,018,404,773 252,410,775 Dr. Burhani Scrap Traders - 6,350,000 6,350,000 - BSRM Wires Ltd. 962,800 Cr. 39,804,150 38,841,350 - BSRM Iron & Steel Co. Ltd. - - BSRM Steels Ltd. 2,775,603,565 Cr. 1,639,086,005 2,426,906,669 3,563,424,229 Cr. H Akberali & Co. Ltd. - 264,441 264,441 - Karnaphuli Engineering Works Ltd. 1,194,000 Dr. 8,469,002 9,656,900 6,102 Dr. BSRM Steels Ltd. - 18,938,903 18,938,903 - BSRM Steel Mills Ltd. - 33,034,657 33,034,657 - BSRM Logistics Ltd. - 6,222,778 6,222,778 - BSRM Iron and Steel Co. Ltd. - 1,163,077 1,163,077 - Bangladesh Steels Ltd. - 46,480 46,480 -
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38.00 Contingent liabilities The company had contingent liabilities at the reporting date which are as follows:
Amount Particulars Present status (Taka) Pending for hearing and amount of liability Against approval of value addition in 2003 - can not be estimated at this stage
Penalty imposed by VAT Authority in 2004 100,000 Pending before the High Court Division of Demand raised by VAT Authority in 2004 for 536,174 Supreme Court difference in selling price Against trade VAT in 2006 178,415 Pending before the High Court Division of Against percentage of wastage (4% in place of Supreme Court and liability of which can - 2.50%) in 2011 not be estimated at this stage.
38.01 Status of pending litigation with the Income Tax authority for dispute with respect to income tax liability. Disputed amount of tax liability has already been deducted by Income Tax authority and shown as advance income tax under advance, deposits and pre-payments. Assessment year Unit Amount (Tk.) Present status 2001-2002 BSRM 4,900,000 2002-2003 BSRM 10,561,562 Pending before High Court Division of 2005-2006 BSRM 9,861,000 Supreme Court for hearing as the company 2003-2004 SMW 14,764,000 appealed against the order of Appellate 2005-2006 SMW 3,266,000 Tribunal. 2009-2010 SMW 2,320,000 45,672,562
39.00 Guarantees 31.12.2013 31.12.2012 Taka Taka 39.01 Bank guarantees Bank Guarantee Against Bakhrabad Gas System 549,497 1,138,472 Deposit to Customs Authority against claim under appeal 1,545,145 1,545,145 2,094,642 2,683,617 The above margin and deposits have been included in Advance, Deposits and Pre-payments.
39.02 Corporate guarantees The company has a policy to extend corporate guarantee for the financial arrangements of the sister companies within the group. At the reporting date, status of such guarantee was as follows:
Name of inter companies Against Maximum limit (in million) (Taka) BSRM Steels Ltd. L/C liability 20,115 BSRM Iron and Steel Co. Ltd. L/C liability 15,430 35,545
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40.00 Financial Instruments- Accounting classifications and fair values The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy (Note- 4). It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Carrying amount Fair Value Fair value Other Held to Loans and Available for Note ref. through profit financial Total Level 1 Level 2 Level 3 Total maturity receivables sale or loss liabilities 31st December, 2013 Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Financial Assets measured at fair value: Investments in tradable securities 8.03 - - - 15,711,449 - 15,711,449 15,711,449 - - 15,711,449 Financial Assets not measured at fair value: Trade and other receivables 10 & 11 - - 483,458,932 - - 483,458,932 Due from inter companies 12 - - 2,277,089,379 - - 2,277,089,379 Investments in non-tradable securities 8.02 - - - 1,000,300 - 1,000,300 Investments in FDR 8.02 & 8.03 - - - 160,827,797 - 160,827,797 Cash at bank 14 - - 95,316,305 - - 95,316,305 - - 2,855,864,616 161,828,097 - 3,017,692,713
Financial Liabilities not measured at fair value: Trade and other payables 19 & 21 - - - - (3,780,280,266) (3,780,280,266) Due to inter companies 23 - - - - (2,401,210,345) (2,401,210,345) Short term liabilities 20 - - - - (3,631,028,292) (3,631,028,292) Long term loan 17 - - - - (1,898,882,168) (1,898,882,168) Other liabilities 26 - - - - (15,205,912) (15,205,912) - - - - (11,726,606,983) (11,726,606,983) 31st December, 2012 Financial Assets: Investments in tradable securities 8.03 - - - 18,506,460 - 18,506,460 18,506,460 - - 18,506,460 Financial Assets not measured at fair value: Trade and other receivables 10 & 11 - - 692,018,643 - - 692,018,643 Due from inter companies 12 - - 1,409,473,023 - - 1,409,473,023 Investments in non-tradable securities 8.02 - - - 1,000,300 - 1,000,300 Investments in FDR 8.02 & 8.03 - - - 253,261,311 - 253,261,311 Cash at bank 14 - - 81,742,409 - - 81,742,409 - - 2,183,234,075 254,261,611 - 2,437,495,686 Financial Liabilities not measured at fair value: Trade and other payables 19 & 21 - - - - (2,899,077,614) (2,899,077,614) Due to inter companies 23 - - - - (369,924,616) (369,924,616) Short term liabilities 20 - - - - (3,351,042,310) (3,351,042,310) Long term loan 17 - - - - (1,545,166,504) (1,545,166,504) Other liabilities 26 - - - - (23,806,970) (23,806,970) - - - - (8,189,018,014) (8,189,018,014)
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41.00 Financial instruments- Financial risk management The Company has exposure to the following risks from its use of financial instruments: ( i ) Credit risk ( ii ) Liquidity risk ( iii ) Market risk 41.01 Risk management framework The company management has overall responsibility for the establishment and oversight of the Company’s risk management framework. The company’s management policies are established to identify and analyze the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limit. Risk management policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company’s activities. 41.02 Credit risk Credit risk is risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations which arises principally from the Company’s receivables and investments. 41.02.01 Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows: 31.12.2013 31.12.2012 Taka Taka Investment in quoted shares and debt securities 15,711,449 18,506,460 Investments in non-tradable shares 1,000,300 1,000,300 Investments in FDRs (Short term & long term) 160,827,797 253,261,311 Advances and deposits 1,597,513,355 484,118,657 Trade and other receivables 483,458,932 692,018,643 Due from inter companies 2,277,089,379 1,409,473,023 Cash and cash equivalents 95,316,305 81,742,409 4,630,917,517 2,940,120,803 (a) Trade and other receivables The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry in which customers operate. During 2013, 99.25 % ( 2012: 99.78%) of the company's receivables balance was with various outside parties. However, based on the company's operations there is no concentration of credit risk.
The company's management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. The company review includes clients goodwill and in some cases bank references. Customers that fails to meet the company's standard credit policy may transact with the company only on a pre-payment basis.
Ageing of trade and other receivables The ageing of gross value at the reporting date that was not impaired was as follows: 31.12.2013 31.12.2012 Taka Taka 0-90 days 349,790,137 586,390,027 91- 180 days 74,582,872 45,087,764 Over 180 days 59,085,923 60,540,852 483,458,932 692,018,643 The management believes that the amounts are collectible in full, based on historic payment behaviour and extensive analysis of customer credit risk, including underlying customers' credit ratings if they are available. (b) Due from inter companies The carrying amount represents amount paid to one of the inter companies to meet its operational finance from time to time. The outstanding balance is redeemable including 15.50% interest per annum and has no prescribed repayment schedule. (c) Cash and cash equivalents The company held cash at bank of Tk. 95,316,305 at December 31, 2013 ( 2012: Tk. 81,742,409), which represents its maximum credit exposure on these assets. The balance with banks are maintained with both local branch of International banks and domestic scheduled banks. (d) Guarantees The company's policy is to provide financial guarantees only to its sister companies. At December 31, 2013 the company has a number of corporate guarantees for L/C liabilities of sister companies (refer to Note - 39.02).
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41.03 Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
41.03.01 Exposure to Liquidity risk The following are the contractual maturities of financial liabilities: Non-derivative Contractual cash flows Carrying financial liabilities amount Within 12 months 1 to 5 years More than 5 years Total Taka Taka Taka Taka Taka As at 31.12.2013 Long term loan 1,898,882,168 492,699,556 1,406,182,612 - 1,898,882,168 Trade creditors 3,563,424,229 3,563,424,229 - - 3,563,424,229 Short term liabilities 3,631,028,292 3,631,028,292 - - 3,631,028,292 Liabilities for expenses 216,856,037 216,856,037 - - 216,856,037 Due to inter companies 2,401,210,345 2,401,210,345 - - 2,401,210,345 Provision for WPPF and 806,385 806,385 - - Welfare Fund 806,385 Other liabilities 15,205,912 15,205,912 - - 15,205,912 11,727,413,368 10,321,230,756 1,406,182,612 - 11,727,413,368 Non-derivative financial liabilities As at 31.12.2012 Long term loan 1,545,166,504 316,932,594 1,102,694,386 125,539,524 1,545,166,504 Trade creditors 2,781,935,317 2,781,935,317 - - 2,781,935,317 Short term liabilities 3,351,042,310 3,351,042,310 - - 3,351,042,310 Liabilities for expenses 117,142,297 117,142,297 - - 117,142,297 Due to inter companies 369,924,616 369,924,616 - - 369,924,616 Provision for WPPF and 2,665,273 2,665,273 - - Welfare Fund 2,665,273 Other liabilities 23,806,970 23,806,970 - - 23,806,970 8,191,683,287 6,963,449,377 1,102,694,386 125,539,524 8,191,683,287
41.04 Market risk Market risk is the risk that changes in market prices such as foreign exchange rates, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. 41.04.01 Currency risk exposure and its management The company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currencies of the company. To manage this exposure, the company is adapted direct risk reduction methods based on matching receipts and payments on assets and liabilities. The Company is exposed to foreign currency risk relating to purchases, sales and other transactions which are denominated in foreign currencies. As at 31 December 2013, the Company was exposed to foreign currency risk in respect of financial liabilities denominated in the following currencies:
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31.12.2013 31.12.2012 Exposure to currency risk US$ Taka US$ Taka Foreign currency denominated assets: Cash and cash equivalents 1,921 149,942 91 7,407 Trade and other receivables 152,723 11,813,086 - - 154,644 11,963,028 91 7,407 Foreign currency denominated liabilities: Inland Foreign Documentary Bills For 6,560,230 513,337,980 7,478,891 598,311,309 Collection (IFDBC) 6,560,230 513,337,980 7,478,891 598,311,309 Net exposure 6,714,874 525,301,008 7,478,982 598,318,716
The following significant exchange rate is applied during the period:
US dollar 78 80 Sensitivity analysis A reasonably possible strengthening (weakening) of the US Dollar against BD Taka at the reporting date would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. Profit or loss Equity- net of tax 31 December 2013 Strengthening Weakening Strengthening Weakening Taka Taka Taka Taka USD (2% movement) (10,027,499) 10,027,499 (6,267,187) 6,267,187
31 December 2012 USD (2% movement) (11,966,078) 11,966,078 (7,478,799) 7,478,799
41.04.02 Transaction risk Transaction risk is the risk that the company will incur exchange losses when the accounting results are translated into the home currency. 41.04.03 Economic risk Economic risk refers to the effect of exchange rate movements on the international competitiveness of the company. 41.04.04 Interest risk Interest rate risk arises from movement in interest rates. The company needs to manage interest rate risk so as to be able to re-pay debts as they fall due and to minimize the risks surrounding interest payments and receipts. Exposure to interest rate risk The interest rate profile of the company's interest- bearing financial instruments as reported to the management of the company is as follows. 2013 2012 Fixed- rate instruments Taka Taka Financial assets 2,437,917,176 1,670,711,218 Financial liabilities (7,931,120,805) (5,266,133,430) (5,493,203,629) (3,595,422,212) Variable- rate instruments Financial assets - - Financial liabilities - - - -
41.05 Other market price risk The company is exposed to equity price risk, which arises from available for sale equity and debt securities. Management of the company monitors its investment portfolio based on market indices and all buy and sell decisions are approved by the Directors.
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42.00 Operating lease 31.12.2013 31.12.2012 Taka Taka Operating lease rentals as per BAS 17: Leases are payable as follows : Within one year 9,916,144 17,386,275 Within 2 to 5 years 6,173,725 54,842,448 After 5 years - - 16,089,869 72,228,723
43.00 Capital commitment The company has decided to increase its production capacity to 450,000 MT from existing 120,000 MT per annum by modernizing its existing Re-rolling plant located at Nasirabad Industrial Area, Baizid Bostami Road, Chittagong. The entire plant will be fully automated and configured in such a way so as to maximize the output and reduce production cost. The estimated project cost stands at Tk. 4,800 million. Out of required amount, Tk. 600 million has been financed by One Bank Ltd.- the lead arranger and 6 (Six) other Banks and Non-Banking Financial Institutions under syndication. A further sum of Tk. 2,790 million will be financed under a syndicated term loan facility arranged by UCBL as lead arranger and other 15 participants. Balance amount will be financed from the sponsors' own sources. 2013 2012 44.00 Production capacity Installed Capacity (In M.Ton) yearly 120,000 120,000 Production (In M.Ton) 106,810 94,127 Capacity utilized (%) 89.01 78.44 45.00 Employees Number of employees whose monthly salary was below Tk. 3,000 - - Number of employees whose monthly salary was above Tk. 3,000 718 712 718 712 46.00 Events After Reporting Date No material events have occurred from the reporting date to the date of issuing of these financial statements which could affect the values stated therein.
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47.00 Terms and conditions of short term liabilities
Sanctioned limit (Figures in crore) Rate of S.L NAME OF BANKS CC pledge/Hypo, Nature of Security Time Interest LTR over draft and loan bridge loan Mortgage: 1. Plot No. 147,148,149 located at Nasirabad I/A measuring 2.79 Acres or 279.00 decimals of land. 2. Plot No. 3796 located at Madarbari, Chittagong measuring 0.451 acres or 40.50 decimals of land. 3. Plot No. 10 located at Agrabad Commercial Area, Chittagong measuring 1.29 Bigha or 42.57 decimals land. 4. Plot No. 91/99 located at Panchlaish R/A, Chittagong measuring 20.75 decimals Land. 1 Agrani Bank Ltd. 10.00 58.00 12% 5. Plot No. 1786/2330 located at Sitakunda, Bhatiary, Chittagong measuring 155.00 decimals nal land. 6. 144 located at Motijheel C/A, Dhaka measuring 11.55 decimals land. 7. Plot No. 23,25,26,29,30,2585,2584,2578,2577 22 and full of R.S plot No. 24 198.00 decimals of land located at Nasirabad, Chittagong. 8. Plot No. 8 of Block D located at Sholashahar Light I/A (Ruby Investment) measuring 325.00 decimals of land. Total Land =(279.00+83.07+20.75+155.00+11.55+198.00+325.00)=1072.37 decimals of Homestead, Factory Building and Nal Land.
2 AB Bank Ltd. 18.00 14.50% Post dated cheque, corporate guarantee & personal guarantee of all Directors. 3 Al-Arafah Islami Bank Ltd. 65.00 10.00 15.50% Post dated cheque, corporate guarantee & personal guarantee of all directors. 4 Bank Al Falah Ltd. 30.00 - 15% Cross corporate guarantee, personal guarantee of all directors, hypothecation of stocks & book debts with RJSC. 5 Basic Bank Ltd. 30.00 2.00 16% Personal guarantee of all directors, lien on FDR for Tk. 1.00 crore. For SOD facility hypothecation of stocks & book debts with RJSC. 6 Commercial Bank of Ceylon 14.00 - 14.00% Hypothecation of stocks & book debts with RJSC & personal guarantee of all directors. 7 Habib Bank Ltd. 5.00 15.00 2.00 13% Legal mortgage of Section Steel Ind. Ltd., Equitable mortgage of Section Steel Ind. Ltd., Corporate guarantee & personal guarantee of DPall directors. note, personal guarantee of all directors, corporate guarantee. Registered mortgage of residence at Nasirabad H/S of Mr. 8 HSBC Ltd. 98.00 - 14% Alihussain Akberali. Hypothecation of stocks & book debts with RJSC. Lien on Tk. 2.00 crore FDR dated 28.02.12 of IPDC Ltd. Mortgage of 710.50 decimal land located at Sonapaher, 107.00 decimal land located at Khilmurari, 66.50 decimal land located at 9 Islami Bank Bangladesh Ltd. 200.00 - 15.20% Sonapaher, 60.00 decimal of land located at Sonapahar, 46.00 decimal land located at Khilmurai and 56.00 decimal land located at Sonapahar, Mirasarai, Chittagong. Total 1046.00 decimal land, hypothecation of stocks and book debts with RJSC. 10 Jamuna Bank Ltd. 20.00 3.00 15.50% Hypothecation of stocks & book debts with RJSC & corporate guarantee, personal guarantee of all directors. 11 Mercantile Bank Ltd. 80.00 - 15% Counter guarantee, personal guarantee, post dated cheque & hypothecation of stocks & book debts with RJSC. 12 National Bank Ltd. 125.00 5.00 15.50% Post dated cheque, corporate guarantee & personal guarantee of all directors. National Credit and Commerce 13 100.00 14% Post dated cheque, corporate guarantee & personal guarantee of all directors. Bank Ltd. 14 One Bank Ltd. 37.52 - 15.50% Post dated cheque, corporate guarantee & personal guarantee of all directors. 15 Prime Bank Ltd. 50.00 15.00 14.50% Hypothecation of stocks & book debts with RJSC, IGPA, cross corporate guarantee, personal guarantee of all directors. 16 Pubali Bank Ltd 50.00 25.00 15% Post dated cheque, corporate guarantee & personal guarantee of all directors. 17 Standard Bank Ltd. 20.00 15.50% 4.08 acres of land at Boalkhali, Chittagong. 18 Standard Chartered Bank Ltd. 103.50 3.00 14.50% DP note, personal guarantee of all directors, corporate guarantee & registered mortgage over 2.60 acre land of Bangladesh Steels 19 Shahjalal Islami Bank Ltd. 100.00 15.00 15.50% Post dated cheque, corporate guarantee & personal guarantee of all directors. 20 Social Islami Bank Ltd. 60.00 20.00 15.50% Post dated cheque, corporate guarantee & personal guarantee, insurance policy. Post dated cheque, corporate guarantee & personal guarantee. 2.58 acres of land, 1) R,S Plot No.82,92,98,99,1257,101,100,87,75 21 Sonali Bank Ltd. 50.00 10.00 16% Industrial Plot No: 54/55 P.S 37 1.95 Acres. 2) PS No. 33 0.63 Areas of Land. Total= 1.95+.63 =2.58 Acres.
22 Trust Bank Ltd. 60.00 30.00 20.00 14.50% Cross corporate guarantee of the availing concerns & charge created on the fixed & floating assets. Corporate guarantee of H. Akberali & Co. Ltd. 23 United Commercial Bank Ltd. - 50.00 16.00% Post dated cheque and personal guarantee of all directors of the company. Lien on 60 lac equity shares of BSRM Steels Ltd. TOTAL 1,288.02 258.00
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BANGLADESH STEEL RE-ROLLING MILLS LIMITED Auditor's Report in pursuance of section 135 (1) under para 24(1) of part II of the Third Schedule of The Companies Act 1994
We, as the auditors of the above company , having examined the Financial Statements of Bangladesh Steel Re-Rolling Mills Limited for the year ended 31 December 2013 and also for the year ended 31 December 2012 and the figures extracted from the Financial Statements for the remaining years ended 31 December 2011, 2010 and 2009, which were audited by M. A. Mallik & Co., Chartered Accountants, in pursuance of Section 135 (1) under para 24(1) of part II of the third schedule of the Companies Act 1994, report that: The Company was formed and incorporated with the Registrar of Joint Stock Companies and Firms in Bangladesh on 28 December 1960 vide the certificate C/186- No. 1491/92 E.P. of 1960-1961 under Companies Act VII of 1913 (since repealed and substituted by the Companies Act 1994) as a private company limited by share. The company was converted into a public limited company on 3 November 2009 under the Companies Act 1994.
The statements of assets and liabilities, operating results and cash flows of Bangladesh Steel Re-Rolling Mills Limited are as under: A. The statements of assets and liabilities of the company are as under:
As at As at As at As at 31 Dec 2013 31 Dec 2012 31 Dec 2011 31 Dec 2010 As at 31 Dec 2009 (Restated) (Individual) (Consolidated) (Individual) Taka Taka Taka Taka Taka Taka Assets Non-current assets: Property, plant and equipment 7,529,916,848 6,964,938,158 6,471,665,967 2,871,973,488 6,526,958,811 2,642,034,990 Accumulated depreciation (523,802,219) (247,785,834) (1,661,888,027) (757,283,962) (956,615,561) (640,187,338) 7,006,114,629 6,717,152,324 4,809,777,940 2,114,689,526 5,570,343,250 2,001,847,652 Capital work-in-progress 345,062,819 414,664,946 39,163,676 - 1,655,150 - Investment in associates 3,268,469,944 1,984,714,569 990,711,483 Other investment 99,527,794 53,659,911 38,466,361 1,030,617,934 371,619,522 1,127,914,790 Total non-current assets 10,719,175,186 9,170,191,750 5,878,119,460 3,145,307,460 5,943,617,922 3,129,762,442 Current assets: Inventories 5,889,585,061 4,766,400,890 5,142,826,219 1,361,127,992 4,317,180,551 1,014,046,531 Accounts receivable 404,867,366 543,137,398 443,148,097 456,879,003 673,858,285 248,223,746 Other receivable 78,591,566 148,881,245 150,890,735 Due from inter companies 2,277,089,379 1,409,473,023 2,342,089,197 2,258,172,554 1,057,307,753 1,057,307,753 Advances, deposits and prepayments 1,597,513,355 484,118,657 552,749,319 371,335,285 1,451,670,889 273,551,258 Short term investment 78,011,752 232,608,160 250,258,588 Cash and cash equivalents 99,302,648 85,564,964 94,722,689 76,263,415 281,865,150 131,289,824 Total current assets 10,424,961,127 7,670,184,337 8,976,684,844 4,523,778,249 7,781,882,628 2,724,419,112 Total assets 21,144,136,313 16,840,376,087 14,854,804,304 7,669,085,709 13,725,500,550 5,854,181,554 Equity and Liabilities Share capital 1,558,510,380 1,558,510,380 643,454,910 589,700,400 121,250,200 121,250,200 Stock dividend distributable - - - 53,754,510 121,250,200 121,250,200 General reserve 30,170,818 30,170,818 30,170,818 11,271,971 11,271,971 11,271,971 Revaluation reserve 4,129,104,568 4,189,255,118 1,619,084,375 1,282,759,164 1,512,311,150 1,512,310,300 Retained earnings 2,398,521,265 1,747,355,332 1,840,565,341 485,972,890 (505,405,498) 220,399,491 Fair value reserve 2,439,152 1,023,492 - - - - Reserve for issuance of shares - - 271,600,560 - - - against Merger Attributable to equity holders 8,118,746,183 7,526,315,140 4,404,876,004 2,423,458,935 1,260,678,023 1,986,482,162 Non-controlling interest - - - - 56,523,750 - Total equity 8,118,746,183 7,526,315,140 4,404,876,004 2,423,458,935 1,317,201,773 1,986,482,162 Liabilities Non-current liabilities: Long term loan 1,406,182,612 1,228,233,910 331,889,228 453,839,654 2,025,289,000 419,032,515 Deferred tax liabilities 1,071,987,675 882,458,633 682,920,590 - - - Total non-current liabilities 2,478,170,287 2,110,692,543 1,014,809,818 453,839,654 2,025,289,000 419,032,515 Trade creditors 3,563,424,229 2,781,935,317 2,564,880,784 450,130,797 - 866,565,746 Short term liabilities 3,631,028,292 3,351,042,310 3,198,571,591 1,243,119,714 8,465,804,626 1,193,231,335 Liabilities for expenses 216,856,037 117,142,297 399,050,562 24,232,108 73,908,889 6,781,867 Advance against sales 101,714,671 54,956,861 102,301,655 142,991,738 504,165,111 156,040,876 Due to inter companies 2,401,210,345 369,924,616 2,485,811,812 2,374,201,746 - 936,622,325 Long term loan-current portion 492,699,556 316,932,594 379,018,128 329,474,472 632,361,800 217,015,077 Liability against share application money - - 788,759 19,588,759 8,581,826 - Provision for income tax 124,274,416 184,962,166 256,237,264 45,445,005 55,787,360 55,782,360 Provision for WPPF and Welfare Fund 806,385 2,665,273 16,775,066 4,601,174 1,416 1,416 Other liabilities 15,205,912 23,806,970 31,682,861 158,001,607 642,398,749 16,625,875 Total current liabilities 10,547,219,843 7,203,368,404 9,435,118,482** 4,791,787,120 10,383,009,777 3,448,666,877 Total liabilities 13,025,390,130 9,314,060,947 10,449,928,300 5,245,626,774 12,408,298,777 3,867,699,392 * Total liabilities and equity 21,144,136,313 16,840,376,087 14,854,804,304 7,669,085,709 13,725,500,550 5,854,181,554
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B. The statements of operating results of the company are as follows:
2013 2012 2011 2010 2009 2009 January- January- January- January- January- January- December December December December December December (Individual) (Consolidated) (Individual) Taka Taka Taka Taka Taka Taka
Revenue 8,602,415,008 14,043,421,488 12,664,400,034 7,631,526,626 18,947,341,012 6,069,262,229 Cost of sales (8,102,322,738) (13,345,900,813) (11,587,854,913) (7,173,917,742) (16,916,035,669) (5,671,942,359) Gross profit 500,092,270 697,520,675 1,076,545,121 457,608,884 2,031,305,343 397,319,870
Selling & distribution cost (55,646,511) (35,414,971) (38,089,610) (23,606,384) (145,470,316) (11,397,037) Administrative cost (166,109,408) (176,030,894) (177,468,781) (125,676,917) (191,482,800) (107,244,935) (221,755,919) (211,445,865) (215,558,391) (149,283,301) (336,953,116) (118,641,973) 278,336,351 486,074,810 860,986,730 308,325,583 1,694,352,227 278,677,898 Other Income 6,652,224 108,231 4,913,100 80,887,269 57,056,202 28,587,406 Result from operating activities 284,988,575 486,183,041 865,899,830 389,212,852 1,751,408,429 307,265,304 Finance cost (264,396,406) (278,832,330) (410,009,134) (173,776,786) (1,025,824,844) (207,733,478) Finance income 23,390,549 34,150,796 36,259,657 23,828,180 - 218,398 Loss on revaluation of property, plant & - (28,023,369) - - - - Equipment (241,005,857) (272,704,903) (373,749,477) (149,948,606) (1,025,824,844) (207,515,080) Net profit before tax & WPPF & 43,982,718 213,478,138 492,150,353 239,264,246 725,583,585 99,750,224 Welfare fund Contribution to WPPF & Welfare fund (2,199,136) (10,673,907) (24,607,518) (8,078,008) - (2,945,316) 41,783,582 202,804,231 467,542,835 231,186,238 725,583,585 96,804,908 Non-Operating Income 169,063,732 150,068,986 1,082,183,306 80,584,712 - 54,689,446 Share of profit of associate (net of tax) 934,127,635 312,954,478 289,208,916 - - - 1,103,191,367 463,023,464 1,371,392,222 80,584,712 - 54,689,446 Profit before Income Tax 1,144,974,949 665,827,695 1,838,935,057 311,770,950 725,583,585 151,494,354 Income tax expenses : Current Tax : Current year (124,274,416) (188,224,809) (256,237,264) (45,445,005) (55,787,360) (55,782,360) Previous year (6,612,039) (87,652) (18,947,986) (5,131,265) (12,050,384) (12,050,384) Deferred tax (225,386,883) (23,591,047) (412,951,888) - - - (356,273,338) (211,903,508) (688,137,138) (50,576,270) (67,837,744) (67,832,744) Net profit after tax 788,701,611 453,924,187 1,150,797,919 261,194,680 657,745,841 83,661,610 Other Comprehensive income : Revaluation of property, plant & equipment - 2,004,256,895 - - - - Deferred tax on revaluation surplus of assets - (212,067,263) - - - - Increase in value of investment in tradable shares 1,756,824 1,023,492 - - - -
Share of revaluation surplus of associate - 838,181,557 - - - - Total comprehensive income 790,458,435 3,085,318,868 1,150,797,919 261,194,680 657,745,841 83,661,610 Net profit after tax attributable to: Shareholders of the company 788,701,611 453,924,187 1,150,797,919 261,194,680 398,129,115 83,661,610 Non-controlling interest - - - - 259,616,726 - 788,701,611 453,924,187 1,150,797,919 261,194,680 657,745,841 83,661,610
Earning per share : Basic earnings per share 5.06 2.91 7.38 2.45 4.24 0.89
Rate of dividend declared None 15% (Cash) 100% (Bonus) 15% (Cash) 15%15% (Bonus) (Bonus) 100%15% (Bonus) (Bonus)
Consolidated Financial Statements have not been prepared after 2009 as investment in the subsidiary came down from 54.78% to 33.50% in 2010. In 2012, investment in associates has been recognised under equity method as per BAS 28 and financial statements of 2011 were restated accordingly.
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C. The statements of Cash Flows are as follows:
2013 2012 2011 2010 2009 January- January- January- January- January- December December December December December Taka Taka Taka Taka Taka OPERATING ACTIVITIES:
Paid against revenue expenditure (8,555,015,718) (12,694,385,182) (9,972,152,502) (8,039,041,046) (5,261,539,661) Receipts from customers against sales 8,787,022,059 13,896,087,393 12,639,747,522 7,409,822,231 6,062,580,951 Receipt against other income 190,805,958 135,994,880 112,838,722 96,373,359 54,239,867 Payment from Workers Profit participation fund (4,058,024) (24,783,700) (22,603,076) (3,478,250) (2,945,316) Payment of interest-Net (170,392,847) (514,169,155) (410,009,134) (165,669,024) (207,715,030) Income Tax Paid (166,350,580) (265,067,537) (149,308,208) (70,032,089) (24,862,686)
Net cash provided by/(used in) Operating Activities 82,010,848 533,676,699 2,198,513,324 (772,024,819) 619,758,125
INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (95,680,881) (176,139,631) (1,797,634,899) (419,028,738) (61,130,241) Proceeds from sale of property, plant and equipment 33,393,389 9,032,500 10,112,341 88,477,673 29,344,000 Short term loan to inter companies (867,616,356) 932,616,174 (82,638,781) (1,200,864,801) (808,320,642) Investment (1,397,013,883) (121,226,303) 5,126,184 - (305,119,267) Proceeds from sale of investment in shares 157,727,397 177,725,197 1,002,647,589 106,850,526 1,633,543 Capital Work-in-progress (433,233,750) (387,980,463) (39,163,676) - - Dividend income 101,588,742 153,084,190 146,983 542,821 -
Net cash used in Investing Activities (2,500,835,342) 587,111,664 (901,404,259) (1,424,022,519) (1,143,592,607)
FINANCING ACTIVITIES:
Receipt/(Re-payment) of Term Loan 353,715,664 834,259,148 (285,369,140) 147,266,534 (14,456,009) Loan received from/(paid to) inter companies and directors 2,031,285,729 (2,115,887,196) 91,216,049 1,577,077,257 506,312,783 Receipts of Short term loan 279,985,982 152,470,719 (1,003,061,294) 49,888,379 113,158,680 Receipt from issue of ordinary share - (96,518,239) 347,200,000 - Payment of dividend (232,425,197) - - - - Share application money refunded - (788,759) - 19,588,759 -
Net cash (used in)/provided by Financing Activities 2,432,562,178 (1,129,946,088) (1,293,732,624) 2,141,020,929 605,015,454
Total (a+b+c) 13,737,684 (9,157,725) 3,376,441 (55,026,409) 81,180,972
Opening cash and cash equivalents 85,564,964 94,722,689 91,346,248 131,289,824 50,108,852 Closing cash and cash equivalents 99,302,648 85,564,964 94,722,689 76,263,415 131,289,824 13,737,684 (9,157,725) 3,376,441 (55,026,409) 81,180,972
D. Rate of dividend declared None 15% (Cash) 100% (Bonus) 15% (Cash) 15% (Bonus)
E. The company had no subsidiary as on 31 December 2013.
F. No proceeds or part of proceeds of the issue of shares were applied directly or indirectly by the company in purchase of any other business.
G. The company did not prepare any financial statements after 31 December 2013.
H. Figures for the years 2009 to 2012 have been rearranged wherever considered necessary to ensure comparability with 2013 and better presentation.
Sd/- Rahman Rahman Huq Date: 12 June 2014 Chartered Accountants
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BANGLADESH STEEL RE-ROLLING MILLS LIMITED We have examined the following Earnings per share and other ratios of Bangladesh Steel Re-Rolling Mills Limited for the years ended 31 December 2013, 2012, 2011, 2010 and 2009, which have been produced by the management of the company to us. The preparation of the EPS and the other ratios is the responsibility of the company's management. Our responsibility is to review them and certify as to whether they have been properly prepared using stated principles on the basis of audited financial statements for the years ended 31 December 2013, 2012, 2011, 2010 and 2009. Based on our review, we certify that the company has properly prepared the following EPS and other ratios using stated principles on the basis of audited financial statements for the years ended 31 December 2013, 2012, 2011, 2010 and 2009. Ratios pertinent to the prospectus are as specified in rule 8B (20c)/Annexure B of the Securities and Exchange Commission Rules (Public Issue), 2006.
2010 2009 2009 Ratios Formulae 2013 2012 2011 (Individual) (consolidated) (Individual)
Liquidity Ratios
Current Ratio (Times) Current Assets 0.99 1.06 0.95 0.94 0.75 0.79 Current Liabilities
Quick Ratio (Times) Current Assets-Closing Stock 0.43 0.40 0.41 0.66 0.33 0.50 Current Liabilities Operating Profit/ (Loss) + Time Interest Earn Ratio Finance Income 1.20 1.92 2.23 2.45 1.71 1.50 (Times) Interest expenses
Long term Loan+ Pref. Debt / Equity Ratio (Times) 0.23 0.21 0.16 0.32 2.11 0.32 Share+ Lease obligation Shareholders' equity Operating Ratios
Account Receivable Sales Average Accounts 18.15 28.48 28.14 21.65 46.08 30.59 Turnover Ratio (Times) Receivables
Inventory Turnover Ratio Cost of Sales 1.52 2.69 3.56 6.04 6.38 5.66 (Times) Average Inventories
Sales Asset Turnover Ratio (times) 0.45 0.89 1.12 1.13 2.06 1.15 Average Total Assets
Profitability Ratios
Gross Profit Gross Margin Ratio (%) 5.81% 4.97% 8.50% 6.00% 10.72% 6.55% Sales
Operating income Operating Income Raito (%) 3.31% 3.46% 6.84% 5.10% 9.24% 5.06% Sales
Net Income Ratio (Before Net profit before tax 13.31% 4.74% 14.52% 4.09% 3.83% 2.50% tax) (%) Sales
Net Income Ratio (after tax) Net profit after tax 9.17% 3.23% 9.09% 3.42% 3.47% 1.38% (%) Sales
Net Profit after tax Return on Asset (%) 4.15% 2.86% 10.22% 3.86% 7.14% 1.58% Average total assets
Net Profit after tax Return on Equity (%) 10.08% 7.61% 33.71% 11.85% 41.21% 4.27% Average shareholders equity
Net profit attributable to ordinary share holders Earnings per Share (Taka) 5.06 2.91 7.38 2.45 4.24 0.89 Weighted Average Number of Shares Date: 12 June 2014 Sd/- Rahman Rahman Huq Chartered Accountants Page | 125
INFORMATION AS REQUIRED BY PARA 15 OF SEC'S NOTIFICATION NO. SEC/CMRRCD/2008/186/115/ ADMIN/30; DATED OCTOBER 05, 2011
i) Earnings per Share (EPS) on fully diluted basis (The total existing no. of shares) for the year ended on 31 December 2013
Particulars Amount (Tk) Net profit after Tax 788,701,611 No. of shares before IPO 155,851,038 Earnings per Share (EPS) on fully diluted basis 5.06
ii) Net profit excluding Extra-ordinary income or non-recurring income coming from other than core operation for the year ended on 31 December 2013
Particulars Amount (Tk) Profit before Tax 1,144,974,949 Less:Extra-ordinary income or non-recurring income Profit on sale of machineries 2,951,567 Miscellaneous Income 2,873,362 Profit on sale of motor car 827,295 Dividend income 70,482 Profit on sale of Investment in shares 1,482,841 Excess of proportionate net asset value of association over acquisition cost 498,898,726 507,104,273 Net profit before tax except Extra-ordinary income or non-recurring income 637,870,676 Less: Current tax Expenses from operational income 127,821,709 Less: Deferred tax expenses 150,460,246 Net profit after tax except Extra-ordinary income or non-recurring income 359,588,721
iii) Earnings per shares excluding extra-ordinary income or non-recurring income coming from other than core operations for the year ended on 31 December 2013
Particulars Amount (Tk) Net profit after tax except Extra-ordinary income or non-recurring income 359,588,721 No. of shares before IPO 155,851,038 Earnings per Share (EPS) 2.31 iv) Net Asset Value per Share as on 31 December 2013
With Without Particulars Revaluation (Tk) Revaluation (Tk) Share Capital 1,558,510,380 1,558,510,380 Retained Earnings 2,398,521,265 2,398,521,265 Revaluation Reserve 4,129,104,568 - General reserve 30,170,818 30,170,818 Fair Value Reserve 2,439,152 2,439,152 Total Shareholders' Equity 8,118,746,183 3,989,641,615 Total Number of Ordinary Share 155,851,038 155,851,038 Net Assets Value (NAV) per share (Tk.) 52.09 25.60 Sd/- Mohammad Saif Uddin, FCA, Director Date: 22 September, 2014 Rahman Rahman Huq Chartered Accountants
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Auditor’s additional disclosure on revaluation of fixed assets of Bangladesh Steel Re-Rolling Mills Limited
This is to certify that valuation report against revaluation of fixed assets of Bangladesh Steel Re- Rolling Mills Limited as at 31 December 2011 done by messrs Hoda Vasi Chowdhury & Co., Chartered Accountants dated 02 February 2012 was prepared and duly accounted for by the company in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and other applicable laws, rules, regulations and guidelines as applicable on that date. We also certify that appropriate accounting treatments including provisions, tax and other liabilities as required under the applicable accounting and reporting standards, laws and regulations as on 31 December 2011 , had been made in the financial statements against such revaluation of assets.
Sd/- Date: 9 March 2014 Rahman Rahman & Huq Chartered Accountants
AUDITOR'S ADDITIONAL DISCLOUSURE ON REVALUATION OF FIXED ASSETS OF BANGLADESH STEEL RE-ROLLING MILLS LIMITED
This is to certify that valuation report against revaluation of fixed assets of Bangladesh Steel Re- Rolling Mills Limited as at 31 December 2008, done by Messrs Hoda Vasi Chowdhury & Co., Chartered Accountants dated 28 December 2008, considering the Book Value of assets on 31-12- 2006 was prepared and duly accounted for by the company in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and other applicable laws, rules, regulations and guidelines as applicable on that date.
We also certify that appropriate accounting treatments including provisions and other liabilities as required under the applicable accounting and reporting standards, laws and regulations as on 31 December 2008, had been made in the financial statements against such revaluation of assets.
Sd/- Dated, Chittagong M.A. Mallik & Co. June 15, 2014 Chartered Accountants
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SECTION XV
CREDIT RATING REPORT
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SECTION XVI
APPLICATION FORMS
“শেয়ার বাজারর বববিরয়াগ ঝց বিপ쇍ূ ণ, শজরি ও ব রঝ বববিরয়াগ ি쇁ি”
“Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager.” BANGLADESH STEEL RE-ROLLING MILLS LIMITED APPLICATION FORM APPLICATION FOR SHARES BY INVESTORS OTHER THAN NON-RESIDENT BANGLADESHI(S) Warning: Please read the instructions at the back of this form. Incorrectly filled applications may be rejected.
Banker‟s Sl. No. The Managing Director Bangladesh Steel Re-Rolling Mills Limited Ali Mansion, 1207/1099 Sadarghat Road, Chittagong.
Dear Sir, I/we apply for and request you to allot me/us the ……….number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company‟s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company and deposit the said shares to my BO (Beneficiary Owner) Account and/or a Crossed (Account Payee only) Cheque in respect of any application money refundable by post/courier at my/our risk to the first applicant‟s address stated below:- 1. No. of Shares……….………………….…… of Tk. 35/- each including a premium of Tk. 25/- per share. 2. Amount of Tk.(in figure), ………………….………..….,Taka (in words)………...... …….…………….……….….only deposited vide Cash/Cheque/Draft/Pay Order No…….…………………..…..Dated……...... …………………….…….… on………………… …………………………...... ……….Bank………...... …………...... ……..…………Branch 3. Beneficiary Owner (B/O) Account Number (If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 4. I/we agree to fully abide by the instruction given herein. 5. Particulars of Applicant(s). a) Sole/First Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Postal address:
Occupation: Nationality: For refund warrant: Please write the correct and full name of bank and branch (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors are requested not to use the name of any non-scheduled bank) For refund purpose: I/we want refund through Bank account* Hand delivery/ Courier ( Please put marks in which refund will be made) The applicant shall provide with the same Bank Account number in the application form as it is in the BO account of the applicant. Otherwise the application will be considered invalid & the subscription money may be forfeited. In case of deposit into the applicant‟s bank account, the applicant will bear the applicable charge, if any, of the applicants banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected. For Refund Warrant: Applicant‟s Bank A/C No. Name of the Bank: Branch: b) Second Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Postal address: Occupation: Nationality: 6. I/we hereby declare that I/we have read the Prospectus of „Bangladesh Steel Re-Rolling Mills Limited’, and have willingly subscribed for ………no of shares of Tk. 35/- each including a premium of Tk. 25/- per share on this form. 7. Specimen Signature(s): (i) 1st Applicant Name (in block letters) Signature: (ii) 2nd Applicant Name (in block letters) Signature: …………………………………………………………………………………………..………...…...... ………………………………… BANK’S ACKNOWLEDGMENT Certified that this bank has received Tk………..……………..…….(in word)………...... …………………….. only from Mr./Mrs./Ms………………….…..being the Application Money for ………………..nos. Ordinary Shares of Bangladesh Steel Re-Rolling Mills Ltd.
Banker’s Sl. No. Seal and Date Authorized Signature (Name & Designation)
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Instructions: 1. As per provision of the Depository Act, 1999 and regulations made there under shares will only be issued in dematerialized condition. Please mention your BO (Beneficiary Owner) account number in the Application Form. If you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid. 2. All information must be typed or written in full (in block letters) in English or in Bengali and must not be abbreviated. 3. Application must be made on the Company‟s printed form/photocopy or on typed copy/hand written form thereof. 4. Application must not be for less than 200 ordinary shares and must be for a multiple of 200 ordinary shares. Any application not meeting these criterions will not be considered for allotment purpose. 5. Remittance for the full amount of the shares must accompany each application and must be forwarded to any of the Bankers‟ to the Issue. Remittance should be in the form of cash/cheque/bank draft/pay order payable to one of the Bankers‟ to the Issue favoring “BANGLADESH STEEL RE-ROLLING MILLS LIMITED” and crossed “A/C Payee only” and must be drawn on a bank in the same town as the bank to which the application form has been sent. 6. In the case of a joint application form, the Allotment letter will be dispatched to the person whose name appears first on this application form and where any amount is refundable in whole or in part the same will be refunded by Account Payee cheque by post/courier service to the person named first on this application form in the manner prescribed in the Prospectus. 7. Joint application form for more than two persons will not be accepted. In case of joint application, each party must sign the application form. 8. Applications must be in the full name of individuals or companies or societies or trusts and not in the name of firms, minors or persons of unsound mind. Application from financial and market intermediary companies must be accompanied by Memorandum of Association and Articles of Associations and Certificate of Incorporation. 9. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant. 10. No receipt will be issued for the payment made with application, but the bankers will issue a provisional acknowledgement to the issue for application lodged with them. 11. In the case of non-allotment of securities, if the applicants‟ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms. Otherwise, refund will be made only through “Account Payee” cheque(s) showing bank account number and name of bank and branch as mentioned in the application payable at Dhaka or Chittagong, as the case may be. 12. Allotment shall be made solely in accordance with the instructions of the Bangladesh Securities and Exchange Commission. 13. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the application liable to rejection and subject to forfeiture of application money and / or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Bangladesh Securities and Exchange Commission (BSEC). This may be in addition to any other penalties as may be provided for by the law. 14. Applications which do not meet the above requirements, or applications, which are incomplete, shall not be considered for allotment purpose. 15. The Bankers‟ to the Issue shall be obliged to receive the A/C Payee Cheque(s) on the closing day of the subscription. 16. No sale of securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus have been published. 17. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the commission will forfeit 15% (fifteen) of their subscription money too.
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Bankers to the Issue
BRAC Bank Limited Agrabad Branch Banani Branch, Dhaka Kazirdeuri Branch Nawabpur Branch Asad Gate Branch Donia Branch Khulna Branch Rajshahi Branch Barisal Branch Eskaton Branch Manda Branch Rampura Branch Bashundhara Branch Graphics Building Branch Mirpur Branch Shyamoli branch Bogra Branch Gulshan Branch Momin Road Branch, Chittagong Uttara Branch CDA Avenue Branch Halisohor Branch, Chittagong Narayanganj Branch Zindabazar Branch, Sylhet Jessore Branch
Bank Asia Limited Principal Office Branch, Dhaka Dhanmondi Branch, Dhaka Progoti Soroni Branch, Dhaka MCB Sk. Mujib Road Br., Ctg. MCB Dilkusha Branch, Dhaka Bashundhara Branch, Dhaka Kamal Bazar Branch, Chittagong Agrabad Branch, Chittagong Corporate Branch, Dhaka Moghbazar Branch, Dhaka Strand Road Branch, Chittagong Rajshahi Branch, Rajshahi MCB Banani Branch, Dhaka Scotia Br., Kawran Bazar, Dhaka Station Road Br., Chittagong Sylhet Main Branch, Sylhet Gulshan Branch, Dhaka Mirpur Branch, Dhaka Bahadderhat Branch, Chittagong Sylhet Uposhahar Branch, Sylhet Shantinagar Branch, Dhaka Mohakhali Branch, Dhaka CDA Avenue Br., Chittagong Jessore Branch, Jessore North South Road Br., Dhaka Shymoli Branch, Dhaka Khatungonj Branch, Chittagong Khulna Branch, Khulna Mitford Branch, Dhaka Paltan Branch, Dhaka Anderkilla Branch, Chittagong Bogra Branch, Bogra Uttara Branch, Dhaka
The City Bank Limited Principal Office Branch, Dhaka Dhanmondi Branch, Dhaka Pahartoli Branch, Chittagong Bandar Bazar Br., Sylhet B B Avenue Branch, Dhaka Nawabpur Branch, Dhaka Agrabad Branch, Chittagong Amborkhana Br. Sylhet Imamgonj Branch, Dhaka Bangabandhu Road Br., N.Gonj Khatungonj Branch, Chittagong Moulvi Bazar Branch, Sylhet Johnson Branch, Dhaka Pragati Sarani Branch, Dhaka Anderkilla Branch, Chittagong Jessore Branch, Jessore Kawran Bazar Branch, Dhaka Zinzira Branch, Dhaka Cox‟s Bazar Br. Cox‟s Bazar Khulna Branch, Khulna New Market Branch, Dhaka Shymoli Branch, Dhaka Narsingdi Br. Narsingdi Bogra Branch, Bogra VIP Road Br., Dhaka Tongi Br., Gazipur Comilla Branch, Comilla Barisal Branch, Barisal Islampur Branch, Dhaka Jubilee Road Branch, Chittagong Rajshahi Branch, Rajshahi Rangpur Branch, Rangpur Nawabgonj Branch, Dhaka Chawkbazar Br., Chittagong Zinda Bazar Br., Sylhet Siraigonj Br., Sirajgonj
Dutch-Bangla Bank Limited Pallabi Br. Dhaka Netaiganj Br. Narayanganj Digpait Br. jamalpur Dinajpur Br. Dinajpur Mawna Br. Gazipur Narayangonj ,BSCIC Br. N.gonj Munshiganj Nr. Munshiganj Bhairab Br. Kishorgonj Vatara Br. Dhaka B.B Road Br. Narayanganj Madaripur Br. Madaripur Dagonbhuiyan Br. Feni Baburhat Br. Narsingdi Bhulta Br. Narayangonj Satkhira Br. Satkhira Gobindaganj Br.Gaibandha Dhaka EPZ Br. Dhaka Jubilee Road Br. Chottagong Rajshahi Br. Rajshahi Comilla Br. Comilla Joypara Br. Dhaka CDA Avenue Br. Chittagong Barisal Br. Barisal Laksham Br. Comilla Keraniganj Br. Dhaka Muradpur Br. Chittagong Khulna Br. Khulna Brahmanbaria Br. Brahmanbaria Uttara Sonargaon Janopad Br. Chittagong EPZ Br. Chittagong Choumuhani Br. Noakhali Laxmipur Br. Laxmipur Ashkona Br. Dhaka Patherhat Br. Chittagong Sonagazi Br. Feni Sunamganj Br. Sunamgang Savar Bazar Br. Dhaka Hathazari Br. Chittagong Feni Br. Feni Borolekha Br. Moulvibazar Matuail Br. Dhaka Kadamtali Br. Chittagong Kushtia Br. Kushtia Goala Bazar Br. Sylhet Dania Br. Dhaka Fatikchhari Br. Chittagong Faridpur Br. Faridpur Amberkhana Br. Sylhet Bandura Br. Dhaka Lohagara Br. Chittagong Shahzadpur Br. Sirajganj Habigang Br. Habigang Satmosjid Road Br. Dhaka Khatunganj Br. Chittagong Bogra Br. Bogra Shahajalal Uposhohor Br. Sylhet Uttar Khan Br., Dhaka Halishahar Br. Chittagong Saidpur Br. Nilphamary Golapgonj Br. Sylhet Konabary Br. Gazipur Chokoria Br., Cox‟s Bazar Rangpur Br. Rangpur Biswanath Br. Sylhet Gazipur Chowrasta Br. Gazipur Cox‟s Bazar Br. Cox‟s Bazar Jessore Br. Jessore Sylhet Br. Sylhet Tongi Br. Gazipur Mirzapur Br. Tangail Naogan Br. Naogaon Beani Bazar Br. Sylhet Mirer Bazar Br., Gazipur Tangail Br. Tangail Basurhat Br.(Rural) Noakhali Chhatak Br. Sunamganj Board Bazar Br. Gazipur Mymensing Br. Mymensing Sremangal Br. Moulivibazar Moulavi Bazar Br. Moulavi Bazar Narsingdi Br. Narsingdi Manikgonj Br. Manikgonj Pabna Br. Pabna Panchagarh Br., Panchagarh Narayanganj Br. Narayanganj Jamalpur Br. Jamalpur Ruhitpur Br. Dhaka Patuakhali Br., Patuakhali Pagla Br. Narayanganj Ashulia Br., Dhaka
Dhaka Bank Limited Local Office ,Dhaka Moghbazar Branch, Dhaka Agrabad Branch, Chittagong KDA Avenue Br., Khulna Gulshan Branch, Dhaka Foreign Ex. Br. Dhaka Faridpur Br. Faridpur Rajshahi Branch, Rajshahi Uttara Branch,Dhaka Mirpur Br.,Dhaka Barishal Br. Barishal Narayangonj Br. Narayangonj Khilgaon Branch, Dhaka Goran SME Service center Br. Rangpur Br. Rangpur Bhulta Br. Narayangonj Dhanmondi Branch, Dhaka Haliushahar Br.Chittagong Uposhahar Branch, Sylhet Comilla Branch, Comilla Kawran Bazar Br. Dhaka CDA Avenue Br., Chittagong
Eastern Bank Limited Motijheel Branch, Dhaka Uttara Garib-E-Newaz Br., Dhaka Chandgaon Branch, Chittagong Bogra Branch, Bogra Banasree Branch, Dhaka Mirpur Dar-us-salam Road Br. Panchlaish Br., Chittagong Moulvi Bazar Branch, Sylhet Uttara Branch, Dhaka Shymoli Branch, Dhaka Halishahar Branch, Chittagong Uposhahar Branch, Sylhet Savar Branch, Dhaka Narayangonj Br., Narayangonj Mymensing SME Br. Mymensing Chouhatta Br. Sylhet Bashundhara Branch, Dhaka O.R. Nizam Road Br., Chittagong Rajshahi Branch, Rajshahi Jessore Branch, Jessore Moghbazar Branch, Dhaka Jubilee Road Branch, Chittagong Khulna Branch, Khulna
ICB Head Office. Dhaka Chittagong Branch Rajshahi Branch Khulna Branch Barishal Branch Sylhet Branch Bogra Branch Local Office Branch. Dhaka
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Jamuna Bank Ltd. Motijheel Branch, Dhaka Mirpur Branch, Dhaka Konabari Branch, Gazipur Bogra Branch, Bogra Dhanmondi Branch, Dhaka Dholaikhal Branch, Dhaka Jubilee Road Branch, Chittagong Kushtia Branch, Kustia Sonargaon Road Branch, Dhaka Mohakhali Branch, Dhaka Khatungonj Branch, Chittagong Rajshahi Branch, Rajshahi Dilkusha Branch, Dhaka Gulshan Branch, Dhaka Agrabad Branch, Chittagong Rangpur Branch, Rangpur Shantinagar, Dhaka Uttara Branch, Dhaka Feni Branch, Feni Jessore Branch, Jessore Moulvibazar Branch, Dhaka Banani Branch, Dhaka Sylhet Branch, Sylhet Barisal Branch, Branch Islampur Branch, Dhaka Malibagh Branch, Dhaka Narayanganj Br., Narayanganj Ring Road Branch, Dhaka Savar Branch, Dhaka Comilla Branch, Comilla
Mutual Trust Bank Limited Babu Bazar Br. Dhaka Savar Branch. Dhaka Alankar Mour Br. Chittagong Mymensingh Br.,Mymensingh Banani Branch. Dhaka Shanir Akhra Br. Dhaka CDA Avenue Br. Chittagong Nazirhat Br., Chittagong Dhanmondi Branch. Dhaka Tongi Branch. Dhaka Jubilee Road Br. Chittagong Aman Bazar Br., Chittagong Dholaikhal Branch. Dhaka Gournadi Br. Barisal Khatungonj Br. Chittagong Noria Branch,Shariyatpur Dilkhusha Branch. Dhaka Rajshahi Branch. Rajshahi Agrabad Br. Chittagong Oxygen Mor Br., Chittagong Elephant Road Br. Dhaka Uttara Model Town Br. Dhaka Narayangonj Br. Narayangonj Baridhara Branch, Dhaka Fulbaria Branch. Dhaka Rangpur Branch. Rangpur Sonargaon Br. Narayangonj Bashundhara Branch, Dhaka Gulshan Branch. Dhaka Bogra Br., Bogra Sylhet Branch. Sylhet Raipur Branch,Laxmipur Moulvi Bazar br, Sylhet Feni Branch, Feni Habigonj Br. Habigonj Brahmanbaria Br., Brahmanbaria Principal Branch. Dhaka Mohammadpur Br. Dhaka Cox‟s Bazar Br., Cox‟s Bazar Sreenagar Branch,Dhaka Panthapath Branch. Dhaka Pabna Branch. Pabna Dagonbhuiyan Br., Feni Chandra Branch Pallabi Branch. Dhaka Kushtia Br. Kushtia Ishwardi Br.,Ishwardi Chawk Moghaltuli Br., Dhaka Pragati Sarani Br. Dhaka Jessore Br. Jessore Joypurhat Br.Joypurhat Chokoria Br., Chittagong MTB corporate Center Br,Dhaka Syedpur Branch Thakurgaon Branch, Thakurgaon Comilla Branch, Comilla
Mercantile Bank Limited Main Br., Dhaka Progati Sarani Br., Dhaka Jessore Br., Jessore Feni Br., Feni Dhanmondi Br., Dhaka Mirpur Br., Dhaka Naogaon Br., Naogaon Bogra Br.,Bogra Kawran Bazar Br., Dhaka Uttara Br., Dhaka Sylhet Br., Sylhet Dinajpur Br., Dinajpur Agrabad Br. Satmasjid Road Br., Dhaka Barishal Br., Barishal Narayangonj Br., Narayangonj Banani Br., Dhaka Bijoynagor Br., Dhaka Khulna Br.,Khulna Comilla Br.,Comilla Elephant Road Br., Dhaka Nayabazar Br., Dhaka Rangpur Br.,Rangpur Ring Road Br., Dhaka Motijheel Br., Dhaka Gulshan Br., Dhaka Rajshahi Br. Mohakhali Br., Dhaka
NCC Bank Limited Motijheel Br. Motijheel, Dhaka Savar Br, Dhaka Khulna Br, khulna Rajshahi Br., Rajshahi Dilkusha Br. Dhaka Jatrabari Branch, Dhaka CEPZ Br. Ctg Laxmipur Br., Laxmipur Kawran Bazar Br. Dhaka Gulshan Br. Dhaka Jubilee Road Br. Ctg Rangpur Br., Rangpur Mirpur Br. Dhaka Uttara Br. Dhaka Khatungonj Br., Ctg Chowmuhuni Br., Noakhali Dhanmondi Br., Dhaka Banani Br. Dhaka O.R..Nizam Road Br., Ctg Madaripur Br, Madaripur Mitford Br., Dhaka Babubazar Br., Dhaka Cox‟s Bazar Br., Cox‟s Bazar Bogra Br. Bogra Nawabpur Road Br., Dhaka Bangshal Br. Dhaka Agrabad Br. Ctg Laldighirpar Br., Sylhet Islampur Br, Dhaka Elephant Road Br., Dhaka Anderkilla Br, Ctg Moulivi Bazar Br., Moulivi Bazar Malibagh Br., Dhaka Brahmanbaria Br., B.baria Kadamtali Br, Ctg Chowhatta Branch, Sylhet Moghbazar Br., Dhaka Tangail Branch, Tangail Majhirghat Br, Ctg Kushtia Br., Kushtia Pragoti Sarani Br., Dhaka Mymensingh Br.Mymensingh Halishahar Br., Ctg Barisal Br., Barisal Bijoynagar Br, Dhaka Narayangonj Br. Narayangonj Jessore Br. Jessore Dinajpur Br. Dinajpur Foreign Exchange Br. Dhaka Comilla Br, Comilla Maijdee Branch, Noakhali Shyamoli Br, Dhaka Naogaon Br., Naogaon Feni Br. Feni
One Bank Limited Principal Branch, Dhaka Gulshan Br. Dhaka CDA Avenue Br., Chittagong Islampur Br., Sylhet Kawran Bazar Br. Dhaka Uttara Br. Dhaka Khatungonj Br. Chittagong Sitakunda Branch,Chittagong Mirpur Br. Dhaka Banani Br. Dhaka Jubilee Road Br. Chittagong Bogra Br. Bogra Dhanmondi Br. Dhaka Kakrail Br., Dhaka Nanupur Bazar Br., Chittagong Jessore Br. Jessore Ganakbari (EPZ) Br., Dhaka Imamganj Br. Dhaka Boalkhali Br., Chittagong Siraigonj Br., Sirajgonj Progoti Sharani Br., Dhaka Jatrabari Br., Dhaka Ranirhat Br., Chittagong Ramgonj Branch, Laxmipur Elephant Road Br., Dhaka Bangshal Br., Dhaka Chandgaon Br., Chittagong Banasree Br. Banasree Dhaka Nowabgonj Br., Dhaka Narayangonj Br. Narayangonj Raozan Br. Chittagong Laksham Br, Laksham Comilla Joypara Br., Dhaka Madhabdi Branch, Narsingdi Dagon Bhuiyan Br., Feni Maijdee Court Br. Noakhali Motijheel Br. Motijheel, Dhaka Cox‟s Bazar Br., Cox‟s Bazar Feni Branch. Feni Jagannathpur Branch, Dhaka Rajshahi Branch Shahjadpur SME Br. Sirajgon Sylhet Branch., Sylhet Comilla Branch Basabo Branch Satkhira Branch, Satkhira Laldighirpar Br., Sylhet Rangamati Branch, Rangamati Moghbazar Branch, Dhaka Sherpur Branch Raipur Br., Lazmipur Khulna Branch, Khulna Ring Road Branch, Dhaka Rangpur Branch, Rangpur Chandragonj Br., Lakshmipur Brahmanbaria Br. B.baria Tongi SME Branch, Tongi Agrabad Br. Chittagong Chowmuhuni Br., Noakhali
Trust Bank Limited Radisson Water Garden Hotel (RWGH) Br, Dhaka Ashugonj Br. Brahmanbaria Shahjalal Uposhohor Br., Sylhet Jalalabad Cant. Br., Sylhet Khwaja Younus Ali MedicalCollege & Dilkhusha Corp. Br. Dhaka Joydebpur Br, Gazipur Hospital Br, Sirajgonj Momenshahi Cant. Br., Mymensingh Principal Br. Dhaka Rajshahi Br. Rajshahi Rangpur cant. br, Rangpur Bogra Cantt.Br. Bogra Joypara Br. Dhaka Barishal Branch, Barishal Tongi Br, Tongi Jessore Cant.Br. Jessore Uttara Corporate Br., Dhaka Narayangonj Branch Feni Br. Feni Khulna Br, Khulna Mirpur Br. Dhaka Elephant Road Br,Dhaka Narsingdi Br., Narsigndi Comilla Cantt. br, Comilla Karwan Bazar Br. Dhaka Dhanmondi Br. Dhaka Ashulia Br.,Dhaka Chowmohoni Branch Savar Cant. Br, Dhaka Halishahar Br. Chittagong Kadamtali Br. Chittagong Comilla Br. Comilla S.S. Cantt. Br, Tangail
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Social Islami Bank Limited
Principal Branch, Dhaka Begum Rokeya Sarani Br., Dhaka Narayangonj Br., Narayangonj Rajshahi Branch, Rajshahi Gulshan Branch, Dhaka Mirpur Branch Dhaka Sonargaon Br., Narayangonj Sylhet Branch, Sylhet Uttara Branch, Dhaka Panthapath Branch, Dhaka Chandpur Br., Chandpur South Surma Branch, Sylhet Islampur Branch, Dhaka Dhanmondi Branch, Dhaka Comilla Branch Comilla Khulna Branch, Khulna New Eskaton Branch, Dhaka Mohakhali Branch, Dhaka Agrabad Br., Chittagong Jessore Branch, Jessore Babu Bazar Branch, Dhaka Dania Rasulpur Br., Dhaka Chawk Bazar Branch, Chittagong Rangpur Branch, Rangpur Rampura Branch, Dhaka Foreign Exchange Branch, Dhaka Feni Branch, Feni Barisal Branch, Barisal Banani Branch, Dhaka South Banosree Branch Dhaka
United Commercial Bank Limited Principal Branch, Dhaka Dhanmondi Branch, Dhaka Pabna Branch, Pabna Sylhet Br., Sylhet Nayabazar Branch, Dhaka Banani Branch, Dhaka Agrabad Branch, Chittagong Dinajpur Br. Dinajpur Mirpur Branch, Dhaka Narayangonj Br., Narayangonj Khatungonj Branch, Chittagong Kushtia Branch, Kushtia Uttara Branch, Dhaka Tejgaon Branch, Dhaka Jubilee Road Branch, Chittagong Jessore Branch, Jessore Corporate Branch, Dhaka Bijoynagar Branch, Dhaka Cox‟s Bazar Br. Cox‟s Bazar Khulna Branch, Khulna Gulshan Branch, Dhaka Mymensing Br. Mymensing Maijdee Court Br., Noakhali Bogra Branch, Bogra Mohakhali Branch, Dhaka Faridpur Branch, Faridpur Comilla Branch, Comilla Rangpur Branch, Rangpur Barisal Branch, Barisal Rajshahi Branch, Rajshahi
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“শেয়ার বাজারর বববিরয়াগ ঝց বিপ쇍ূ ণ, শজরি ও ব রঝ বববিরয়াগ ি쇁ি”
“Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager.”
BANGLADESH STEEL RE-ROLLING MILLS LIMITED APPLICATION FORM Application for shares by non-resident Bangladeshi(s) (To be sent directly to the company‟s Dhaka office) Warning: Please read the instructions at the back of this form. Incorrectly filled applications may be rejected.
The Managing Director Bangladesh Steel Re-Rolling Mills Limited Ali Mansion, 1207/1099 Sadarghat Road, Chittagong. Dear Sir, I/we apply for and request you to allot me/us the following number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company‟s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company as the holder(s) of…………..Shares allotted to me/us pursuant to his application and credit the said shares to my BO (Beneficiary Owner) Account and/or a Crossed (Account Payee only) Cheque in respect of any application money refundable by post/courier at my/our risk to the first applicant‟s address stated below: 1. No. of Shares……….………………………………...….… of Tk. 35/- each including a premium of Tk. 25/- per share. 2. Amount of Tk. (in figure). ………………………...... ….….. (in words)……………...... ……….…..………….only Convertible into US Dollar 1.00 =Tk...... ……….…., UK Pound Sterling 1.00 Tk...... , and Euro 1.00 Tk…...... 3. Payment by cheque/draft no.…………..…....…, dated…...…...... …………, for US Dollar or UK Pound Sterling or Euro or Tk……….…………..….drawn on……...……...... ………….…………Bank………………………………………….…….Branch. 4. Beneficiary Owner (B/O) Account Number
(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 5. I/we agree to fully abide by the instruction given herein. 6. Particulars of Applicant(s). a) Sole/First Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Mailing address: Occupation: Nationality: Passport No. Valid up to: Date of Birth Telephone No. (If any) For refund warrant: Please write the correct and full name of bank and branch (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors are requested not to use the name of any non- scheduled bank) Applicant‟s Bank A/C No. Name of the Bank: Branch The applicant shall provide with the same bank account number in the application form as it is in the B O account of the applicant. Otherwise the application will be considered invalid & the subscription money may be forfeited. b) Second Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Mailing address: Occupation: Nationality: Passport No. Valid up to: Date of Birth: Telephone No. (If any) Nominee’s Name: Name: Mailing Address: 7. I/we hereby declare that I/we have read the Prospectus of „Bangladesh Steel Re-Rolling Mills Limited’, and have willingly subscribed for ……...... …no of shares of Tk. 35/- each including a premium of Tk. 25./- per share on this form. 8. Specimen Signature(s): Name in Block Letters Signature Sole/First Applicant: Second Applicant: Nominee: * Please see the instructions in paragraphs 14 &15 for the evidence required to establish non-resident Bangladeshi status
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Instructions: 1. As per provision of the Depository Act, 1999 and regulations made there under shares will only be issued in dematerialized condition. Please mention your BO (Beneficiary Owner) account number in the Application Form. If you do not mention your valid BO (Beneficiary Owner) account, your application will be treated as invalid.
2. All information must be written or typed in block letters in English and must not be abbreviated.
3. An application must not be for less than 200 Ordinary Shares and must be for a multiple of 200 ordinary shares. Any application not meeting this criterion will not be considered for allotment purpose.
4. An application must be accompanied by a foreign demand draft drawn on a bank payable at Dhaka or cheque drawn out of foreign currency deposit account maintained in Bangladesh for the full value of shares favoring “BANGLADESH STEEL RE-ROLLING MILLS LIMITED” and crossed “Account Payee only”.
5. An application shall be sent by the applicant directly to the Company by 05/02/2015 so as to reach the Company by 14/02/2015 Applications sent after 05/02/2015 or received by the Company after 14/02/2015 will not be considered for allotment purpose.
6. Refund against over-subscription shall be made in the currency in which the value of shares was paid for by the applicant at the same rate as stated on the application form through Account Payee cheque payable at Dhaka with bank account number, Bank‟s name and Branch as indicated in the securities application form.
7. In case of over-subscription, allotment shall be made by lottery solely in accordance with the instructions by BSEC.
8. Money receipt on clearance of draft or cheque, as the case may be, shall be sent by post to the applicant by the Company.
9. Joint application by two persons will be acceptable. In such a case, allotment or refund shall be made by post to the first applicant. Not that a non-resident Bangladeshi (“NRB”) applicant cannot submit more than two applications, one in his/her own name and another jointly with another person by one Cheque/DD/PO by US $/UK Pound Sterling/ EURO/Taka (supported by a foreign currency encashment certificate). More than two applications by one Cheque/DD/PO by US $/UK Pound Sterling/ EURO/Taka (supported by a foreign currency encashment certificate) will not be allowed.
10. Application must be made by an individual, a corporation or company, a trust or a society and not by a firm, minor or persons of unsound mind.
11. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information in the application shall make the Application liable to rejection and subject to forfeiture of application money and / or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited application money or share (unit) will be deposited in account specified by the Bangladesh Securities and Exchange Commission (BSEC). This may be in addition to any other penalties as may be provided for by the law.
12. The intending NRB applicants shall deposit share money by US$/UK Pound Sterling/EURO draft drawn on any Bank and payable in Dhaka, Bangladesh, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking “Account Payee only”. So that the issuer‟s collecting bank can clear the proceeds and deposit the same into issuer company‟s account in time.
13. The spot buying rate (TT Clean) in US Dollar, UK Pound Sterling and EURO of Sonali Bank at the day of subscription opening will be applicable for the Non Resident Bangladeshi (NRB) applicants.
14. The applicant shall furnish photocopies of relevant pages of valid passports in support of his being a NRB, dual citizenship or of the foreign passport bearing an endorsement from the concerned Bangladeshi Embassy to the effect that no visa is required for him to travel to Bangladesh.
15. In case of joint NRB application joint applicant shall also submit supporting papers /documents in support of their being a NRB as mentioned in para-14 (above).
16. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant.
17. No sale of securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five (25) days after the prospectus have been published.
18. In the case of non-allotment of securities, if the applicants‟ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms. Otherwise, refund will be made only through “Account Payee” cheque(s) with bank account number and name of bank branch as mentioned in the application payable at Dhaka or Chittagong, as the case may be.
19. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the commission may forfeit whole or part of their application too.
THE NRB APPLICATION ALONG WITH THE FOREIGN CURRENCY DRAFT, AS ABOVE, IS TO BE SUBMITTED TO THE COMPANY’S DHAKA OFFICE DIRECTLY WITHIN THE STIPULATED TIME MENTIONED IN PARA 5.
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“শেয়ার বাজারর বববিরয়াগ ঝց বিপ쇍ূ ণ, শজরি ও ব রঝ বববিশয়াগ ি쇁ি”
“Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager.” BANGLADESH STEEL RE-ROLLING MILLS LIMITED APPLICATION FORM APPLICATION FOR SHARES BY AFFECTED SMALL INVESTORS Warning: Please read the instructions at the back of this form. Incorrectly filled applications may be rejected.
Banker‟s Sl. No. The Managing Director Bangladesh Steel Re-Rolling Mills Limited Ali Mansion, 1207/1099 Sadarghat Road, Chittagong.
Dear Sir, I/we apply for and request you to allot me/us the ……….number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company‟s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company and deposit the said shares to my/our BO (Beneficiary Owner) Account and/or a Crossed (Account Payee only) Cheque in respect of any application money refundable by post/courier at my/our risk to the first applicant‟s address stated below:-
1. No. of Ordinary Shares………………...… of Tk. 35/- each including a premium of Tk. 25/- per share. 2. Amount of Tk.(in figure), …………………..,Taka (in words)………...... …………….… ………….……..……….only deposited vide Cash/Cheque/Draft/Pay Order No…………………………….…Dated…….………………………..….……. on...... …….Bank…...... …………………………………………….…Branch 3. Beneficiary Owner (B/O) Account Number (If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 4. I/we agree to fully abide by the instruction given herein. 5. Particulars of Applicant(s). a) Sole/First Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Postal address:
Occupation: Nationality: Telephone No (If any) For refund warrant: Please write the correct and full name of bank and branch (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors are requested not to use the name of any non-scheduled bank) For refund purpose: I/we want refund through Bank account* Hand delivery/ Courier ( Please put marks in which refund will be made) The applicant shall provide with the same Bank Account number in the application form as it is in the BO account of the applicant. Otherwise the application will be considered invalid & the subscription money may be forfeited. In case of deposit into the applicant‟s bank account, the applicant will bear the applicable charge, if any, of the applicants banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected. For Refund Warrant: Applicant‟s Bank A/C No. Name of the Bank: Branch: b) Second Applicant Name: Father‟s /Husband‟s name: Mother‟s name: Postal address: Occupation: Nationality: Telephone No (If any) 6. I/we hereby declare that I/we have read the Prospectus of „Bangladesh Steel Re-Rolling Mills Limited’, and have willingly subscribed for …………..…no of shares of Tk. 35/- each including a premium of Tk. 25/- per share on this form. 7. Specimen Signature(s): (i) 1st Applicant Name (in block letters) Signature: (ii) 2nd Applicant Name (in block letters) Signature:
…………………………………………………………………………………………..………...…...... …………………………………
BANK’S ACKNOWLEDGMENT Certified that this bank has received Tk. (in figure)……… …….…………....(in word)…………...... ….……………….. only from Mr./Mrs./Ms……………………………………...... …..being the Application Money for ………………..nos. Ordinary Shares of Bangladesh Stee Re-Rolling Mills Limited.
Banker’s Sl. No. Seal and Date Authorized Signature (Name & Designation)
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Instructions: 1. As per provision of the Depository Act, 1999 and regulations made there under shares will only be issued in dematerialized condition. Please mention your BO (Beneficiary Owner) account number in the Application Form. If you do not mention your valid BO (Beneficiary Owner) Account, your application will be treated as invalid. 2. All information must be typed or written in full (in block letters) in English or in Bengali and must not be abbreviated. 3. Application must be made on the Company‟s printed form/photocopy or on typed copy/hand written form thereof. 4. Application must not be for less than 200 ordinary shares and must be for a multiple of 200 ordinary shares. Any application not meeting these criterions will not be considered for allotment purpose. 5. Remittance for the full amount of the shares must accompany each application and must be forwarded to any of the Bankers‟ to the Issue. Remittance should be in the form of cash/cheque/bank draft/pay order payable to one of the Bankers‟ to the Issue favoring “Bangladesh Steel Re-Rolling Mills Limited” and crossed “A/C Payee only” and must be drawn on a bank in the same town as the bank to which the application form has been sent. 6. In the case of a joint application form, the Allotment letter will be dispatched to the person whose name appears first on this application form and where any amount is refundable in whole or in part the same will be refunded by Account Payee cheque by post/courier service to the person named first on this application form in the manner prescribed in the Prospectus. 7. Joint application form for more than two persons will not be accepted. In case of joint application, each party must sign the application form. 8. Applications must be in the full name of individuals or companies or societies or trusts and not in the name of firms, minors or persons of unsound mind. Application from financial and market intermediary companies must be accompanied by Memorandum of Association and Articles of Associations and Certificate of Incorporation. 9. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant. 10. No receipt will be issued for the payment made with application, but the bankers will issue a provisional acknowledgement to the issue for application lodged with them. 11. In the case of non-allotment of securities, if the applicants‟ bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application Forms. Otherwise, refund will be made only through “Account Payee” cheque(s) showing bank account number and name of bank and branch as mentioned in the application payable at Dhaka or Chittagong, as the case may be. 12. Allotment shall be made solely in accordance with the instructions of the Bangladesh Securities and Exchange Commission. 13. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the application liable to rejection and subject to forfeiture of application money and / or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Bangladesh Securities and Exchange Commission (BSEC). This may be in addition to any other penalties as may be provided for by the law. 14. Applications which do not meet the above requirements, or applications, which are incomplete, shall not be considered for allotment purpose. 15. The Bankers‟ to the Issue shall be obliged to receive the A/C Payee Cheque(s) on the closing day of the subscription of the IPO. 16. No sale of securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus have been published. 17. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the commission will forfeit 15% (fifteen) of their subscription money too. 18.
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Bankers to the Issue BRAC Bank Limited Agrabad Branch Banani Branch, Dhaka Kazirdeuri Branch Nawabpur Branch Asad Gate Branch Donia Branch Khulna Branch Rajshahi Branch Barisal Branch Eskaton Branch Manda Branch Rampura Branch Bashundhara Branch Graphics Building Branch Mirpur Branch Shyamoli branch Bogra Branch Gulshan Branch Momin Road Branch, Chittagong Uttara Branch CDA Avenue Branch Halisohor Branch, Chittagong Narayanganj Branch Zindabazar Branch, Sylhet Jessore Branch
Bank Asia Limited Principal Office Branch, Dhaka Dhanmondi Branch, Dhaka Progoti Soroni Branch, Dhaka MCB Sk. Mujib Road Br., Ctg. MCB Dilkusha Branch, Dhaka Bashundhara Branch, Dhaka Kamal Bazar Branch, Chittagong Agrabad Branch, Chittagong Corporate Branch, Dhaka Moghbazar Branch, Dhaka Strand Road Branch, Chittagong Rajshahi Branch, Rajshahi MCB Banani Branch, Dhaka Scotia Br., Kawran Bazar, Dhaka Station Road Br., Chittagong Sylhet Main Branch, Sylhet Gulshan Branch, Dhaka Mirpur Branch, Dhaka Bahadderhat Branch, Chittagong Sylhet Uposhahar Branch, Sylhet Shantinagar Branch, Dhaka Mohakhali Branch, Dhaka CDA Avenue Br., Chittagong Jessore Branch, Jessore North South Road Br., Dhaka Shymoli Branch, Dhaka Khatungonj Branch, Chittagong Khulna Branch, Khulna Mitford Branch, Dhaka Paltan Branch, Dhaka Anderkilla Branch, Chittagong Bogra Branch, Bogra Uttara Branch, Dhaka
The City Bank Limited Principal Office Branch, Dhaka Dhanmondi Branch, Dhaka Pahartoli Branch, Chittagong Bandar Bazar Br., Sylhet B B Avenue Branch, Dhaka Nawabpur Branch, Dhaka Agrabad Branch, Chittagong Amborkhana Br. Sylhet Imamgonj Branch, Dhaka Bangabandhu Road Br., N.Gonj Khatungonj Branch, Chittagong Moulvi Bazar Branch, Sylhet Johnson Branch, Dhaka Pragati Sarani Branch, Dhaka Anderkilla Branch, Chittagong Jessore Branch, Jessore Kawran Bazar Branch, Dhaka Zinzira Branch, Dhaka Cox‟s Bazar Br. Cox‟s Bazar Khulna Branch, Khulna New Market Branch, Dhaka Shymoli Branch, Dhaka Narsingdi Br. Narsingdi Bogra Branch, Bogra VIP Road Br., Dhaka Tongi Br., Gazipur Comilla Branch, Comilla Barisal Branch, Barisal Islampur Branch, Dhaka Jubilee Road Branch, Chittagong Rajshahi Branch, Rajshahi Rangpur Branch, Rangpur Nawabgonj Branch, Dhaka Chawkbazar Br., Chittagong Zinda Bazar Br., Sylhet Siraigonj Br., Sirajgonj
Dutch-Bangla Bank Limited Pallabi Br. Dhaka Netaiganj Br. Narayanganj Digpait Br. jamalpur Dinajpur Br. Dinajpur Mawna Br. Gazipur Narayangonj ,BSCIC Br. N.gonj Munshiganj Nr. Munshiganj Bhairab Br. Kishorgonj Vatara Br. Dhaka B.B Road Br. Narayanganj Madaripur Br. Madaripur Dagonbhuiyan Br. Feni Baburhat Br. Narsingdi Bhulta Br. Narayangonj Satkhira Br. Satkhira Gobindaganj Br.Gaibandha Dhaka EPZ Br. Dhaka Jubilee Road Br. Chottagong Rajshahi Br. Rajshahi Comilla Br. Comilla Joypara Br. Dhaka CDA Avenue Br. Chittagong Barisal Br. Barisal Laksham Br. Comilla Keraniganj Br. Dhaka Muradpur Br. Chittagong Khulna Br. Khulna Brahmanbaria Br. Brahmanbaria Uttara Sonargaon Janopad Br. Chittagong EPZ Br. Chittagong Choumuhani Br. Noakhali Laxmipur Br. Laxmipur Ashkona Br. Dhaka Patherhat Br. Chittagong Sonagazi Br. Feni Sunamganj Br. Sunamgang Savar Bazar Br. Dhaka Hathazari Br. Chittagong Feni Br. Feni Borolekha Br. Moulvibazar Matuail Br. Dhaka Kadamtali Br. Chittagong Kushtia Br. Kushtia Goala Bazar Br. Sylhet Dania Br. Dhaka Fatikchhari Br. Chittagong Faridpur Br. Faridpur Amberkhana Br. Sylhet Bandura Br. Dhaka Lohagara Br. Chittagong Shahzadpur Br. Sirajganj Habigang Br. Habigang Satmosjid Road Br. Dhaka Khatunganj Br. Chittagong Bogra Br. Bogra Shahajalal Uposhohor Br. Sylhet Uttar Khan Br., Dhaka Halishahar Br. Chittagong Saidpur Br. Nilphamary Golapgonj Br. Sylhet Konabary Br. Gazipur Chokoria Br., Cox‟s Bazar Rangpur Br. Rangpur Biswanath Br. Sylhet Gazipur Chowrasta Br. Gazipur Cox‟s Bazar Br. Cox‟s Bazar Jessore Br. Jessore Sylhet Br. Sylhet Tongi Br. Gazipur Mirzapur Br. Tangail Naogan Br. Naogaon Beani Bazar Br. Sylhet Mirer Bazar Br., Gazipur Tangail Br. Tangail Basurhat Br.(Rural) Noakhali Chhatak Br. Sunamganj Board Bazar Br. Gazipur Mymensing Br. Mymensing Sremangal Br. Moulivibazar Moulavi Bazar Br. Moulavi Bazar Narsingdi Br. Narsingdi Manikgonj Br. Manikgonj Pabna Br. Pabna Panchagarh Br., Panchagarh Narayanganj Br. Narayanganj Jamalpur Br. Jamalpur Ruhitpur Br. Dhaka Patuakhali Br., Patuakhali Pagla Br. Narayanganj Ashulia Br., Dhaka
Dhaka Bank Limited Local Office ,Dhaka Moghbazar Branch, Dhaka Agrabad Branch, Chittagong KDA Avenue Br., Khulna Gulshan Branch, Dhaka Foreign Ex. Br. Dhaka Faridpur Br. Faridpur Rajshahi Branch, Rajshahi Uttara Branch,Dhaka Mirpur Br.,Dhaka Barishal Br. Barishal Narayangonj Br. Narayangonj Khilgaon Branch, Dhaka Goran SME Service center Br. Rangpur Br. Rangpur Bhulta Br. Narayangonj Dhanmondi Branch, Dhaka Haliushahar Br.Chittagong Uposhahar Branch, Sylhet Comilla Branch, Comilla Kawran Bazar Br. Dhaka CDA Avenue Br., Chittagong
Eastern Bank Limited Motijheel Branch, Dhaka Uttara Garib-E-Newaz Br., Dhaka Chandgaon Branch, Chittagong Bogra Branch, Bogra Banasree Branch, Dhaka Mirpur Dar-us-salam Road Br. Panchlaish Br., Chittagong Moulvi Bazar Branch, Sylhet Uttara Branch, Dhaka Shymoli Branch, Dhaka Halishahar Branch, Chittagong Uposhahar Branch, Sylhet Savar Branch, Dhaka Narayangonj Br., Narayangonj Mymensing SME Br. Mymensing Chouhatta Br. Sylhet Bashundhara Branch, Dhaka O.R. Nizam Road Br., Chittagong Rajshahi Branch, Rajshahi Jessore Branch, Jessore Moghbazar Branch, Dhaka Jubilee Road Branch, Chittagong Khulna Branch, Khulna
ICB Head Office. Dhaka Chittagong Branch Rajshahi Branch Khulna Branch Barishal Branch Sylhet Branch Bogra Branch Local Office Branch. Dhaka
Jamuna Bank Ltd. Motijheel Branch, Dhaka Mirpur Branch, Dhaka Konabari Branch, Gazipur Bogra Branch, Bogra Dhanmondi Branch, Dhaka Dholaikhal Branch, Dhaka Jubilee Road Branch, Chittagong Kushtia Branch, Kustia Sonargaon Road Branch, Dhaka Mohakhali Branch, Dhaka Khatungonj Branch, Chittagong Rajshahi Branch, Rajshahi Dilkusha Branch, Dhaka Gulshan Branch, Dhaka Agrabad Branch, Chittagong Rangpur Branch, Rangpur Shantinagar, Dhaka Uttara Branch, Dhaka Feni Branch, Feni Jessore Branch, Jessore Moulvibazar Branch, Dhaka Banani Branch, Dhaka Sylhet Branch, Sylhet Barisal Branch, Branch Islampur Branch, Dhaka Malibagh Branch, Dhaka Narayanganj Br., Narayanganj Ring Road Branch, Dhaka Savar Branch, Dhaka Comilla Branch, Comilla Page | 149
Mutual Trust Bank Limited Babu Bazar Br. Dhaka Savar Branch. Dhaka Alankar Mour Br. Chittagong Mymensingh Br.,Mymensingh Banani Branch. Dhaka Shanir Akhra Br. Dhaka CDA Avenue Br. Chittagong Nazirhat Br., Chittagong Dhanmondi Branch. Dhaka Tongi Branch. Dhaka Jubilee Road Br. Chittagong Aman Bazar Br., Chittagong Dholaikhal Branch. Dhaka Gournadi Br. Barisal Khatungonj Br. Chittagong Noria Branch,Shariyatpur Dilkhusha Branch. Dhaka Rajshahi Branch. Rajshahi Agrabad Br. Chittagong Oxygen Mor Br., Chittagong Elephant Road Br. Dhaka Uttara Model Town Br. Dhaka Narayangonj Br. Narayangonj Baridhara Branch, Dhaka Fulbaria Branch. Dhaka Rangpur Branch. Rangpur Sonargaon Br. Narayangonj Bashundhara Branch, Dhaka Gulshan Branch. Dhaka Bogra Br., Bogra Sylhet Branch. Sylhet Raipur Branch,Laxmipur Moulvi Bazar br, Sylhet Feni Branch, Feni Habigonj Br. Habigonj Brahmanbaria Br., Brahmanbaria Principal Branch. Dhaka Mohammadpur Br. Dhaka Cox‟s Bazar Br., Cox‟s Bazar Sreenagar Branch,Dhaka Panthapath Branch. Dhaka Pabna Branch. Pabna Dagonbhuiyan Br., Feni Chandra Branch Pallabi Branch. Dhaka Kushtia Br. Kushtia Ishwardi Br.,Ishwardi Chawk Moghaltuli Br., Dhaka Pragati Sarani Br. Dhaka Jessore Br. Jessore Joypurhat Br.Joypurhat Chokoria Br., Chittagong MTB corporate Center Br,Dhaka Syedpur Branch Thakurgaon Branch, Thakurgaon Comilla Branch, Comilla
Mercantile Bank Limited Main Br., Dhaka Progati Sarani Br., Dhaka Jessore Br., Jessore Feni Br., Feni Dhanmondi Br., Dhaka Mirpur Br., Dhaka Naogaon Br., Naogaon Bogra Br.,Bogra Kawran Bazar Br., Dhaka Uttara Br., Dhaka Sylhet Br., Sylhet Dinajpur Br., Dinajpur Agrabad Br. Satmasjid Road Br., Dhaka Barishal Br., Barishal Narayangonj Br., Narayangonj Banani Br., Dhaka Bijoynagor Br., Dhaka Khulna Br.,Khulna Comilla Br.,Comilla Elephant Road Br., Dhaka Nayabazar Br., Dhaka Rangpur Br.,Rangpur Ring Road Br., Dhaka Motijheel Br., Dhaka Gulshan Br., Dhaka Rajshahi Br. Mohakhali Br., Dhaka
NCC Bank Limited Motijheel Br. Motijheel, Dhaka Savar Br, Dhaka Khulna Br, khulna Rajshahi Br., Rajshahi Dilkusha Br. Dhaka Jatrabari Branch, Dhaka CEPZ Br. Ctg Laxmipur Br., Laxmipur Kawran Bazar Br. Dhaka Gulshan Br. Dhaka Jubilee Road Br. Ctg Rangpur Br., Rangpur Mirpur Br. Dhaka Uttara Br. Dhaka Khatungonj Br., Ctg Chowmuhuni Br., Noakhali Dhanmondi Br., Dhaka Banani Br. Dhaka O.R..Nizam Road Br., Ctg Madaripur Br, Madaripur Mitford Br., Dhaka Babubazar Br., Dhaka Cox‟s Bazar Br., Cox‟s Bazar Bogra Br. Bogra Nawabpur Road Br., Dhaka Bangshal Br. Dhaka Agrabad Br. Ctg Laldighirpar Br., Sylhet Islampur Br, Dhaka Elephant Road Br., Dhaka Anderkilla Br, Ctg Moulivi Bazar Br., Moulivi Bazar Malibagh Br., Dhaka Brahmanbaria Br., B.baria Kadamtali Br, Ctg Chowhatta Branch, Sylhet Moghbazar Br., Dhaka Tangail Branch, Tangail Majhirghat Br, Ctg Kushtia Br., Kushtia Pragoti Sarani Br., Dhaka Mymensingh Br.Mymensingh Halishahar Br., Ctg Barisal Br., Barisal Bijoynagar Br, Dhaka Narayangonj Br. Narayangonj Jessore Br. Jessore Dinajpur Br. Dinajpur Foreign Exchange Br. Dhaka Comilla Br, Comilla Maijdee Branch, Noakhali Shyamoli Br, Dhaka Naogaon Br., Naogaon Feni Br. Feni
One Bank Limited Principal Branch, Dhaka Gulshan Br. Dhaka CDA Avenue Br., Chittagong Islampur Br., Sylhet Kawran Bazar Br. Dhaka Uttara Br. Dhaka Khatungonj Br. Chittagong Sitakunda Branch,Chittagong Mirpur Br. Dhaka Banani Br. Dhaka Jubilee Road Br. Chittagong Bogra Br. Bogra Dhanmondi Br. Dhaka Kakrail Br., Dhaka Nanupur Bazar Br., Chittagong Jessore Br. Jessore Ganakbari (EPZ) Br., Dhaka Imamganj Br. Dhaka Boalkhali Br., Chittagong Siraigonj Br., Sirajgonj Progoti Sharani Br., Dhaka Jatrabari Br., Dhaka Ranirhat Br., Chittagong Ramgonj Branch, Laxmipur Elephant Road Br., Dhaka Bangshal Br., Dhaka Chandgaon Br., Chittagong Banasree Br. Banasree Dhaka Nowabgonj Br., Dhaka Narayangonj Br. Narayangonj Raozan Br. Chittagong Laksham Br, Laksham Comilla Joypara Br., Dhaka Madhabdi Branch, Narsingdi Dagon Bhuiyan Br., Feni Maijdee Court Br. Noakhali Motijheel Br. Motijheel, Dhaka Cox‟s Bazar Br., Cox‟s Bazar Feni Branch. Feni Jagannathpur Branch, Dhaka Rajshahi Branch Shahjadpur SME Br. Sirajgon Sylhet Branch., Sylhet Comilla Branch Basabo Branch Satkhira Branch, Satkhira Laldighirpar Br., Sylhet Rangamati Branch, Rangamati Moghbazar Branch, Dhaka Sherpur Branch Raipur Br., Lazmipur Khulna Branch, Khulna Ring Road Branch, Dhaka Rangpur Branch, Rangpur Chandragonj Br., Lakshmipur Brahmanbaria Br. B.baria Tongi SME Branch, Tongi Agrabad Br. Chittagong Chowmuhuni Br., Noakhali
Trust Bank Limited Radisson Water Garden Hotel Ashugonj Br. Brahmanbaria Shahjalal Uposhohor Br., Sylhet Jalalabad Cant. Br., Sylhet (RWGH) Br, Dhaka Dilkhusha Corp. Br. Dhaka Joydebpur Br, Gazipur Khwaja Younus Ali MedicalCollege Momenshahi Cant. Br., Mymensingh & Hospital Br, Sirajgonj Principal Br. Dhaka Rajshahi Br. Rajshahi Rangpur cant. br, Rangpur Bogra Cantt.Br. Bogra Joypara Br. Dhaka Barishal Branch, Barishal Tongi Br, Tongi Jessore Cant.Br. Jessore Uttara Corporate Br., Dhaka Narayangonj Branch Feni Br. Feni Khulna Br, Khulna Mirpur Br. Dhaka Elephant Road Br,Dhaka Narsingdi Br., Narsigndi Comilla Cantt. br, Comilla Karwan Bazar Br. Dhaka Dhanmondi Br. Dhaka Ashulia Br.,Dhaka Chowmohoni Branch Savar Cant. Br, Dhaka Halishahar Br. Chittagong Kadamtali Br. Chittagong Comilla Br. Comilla S.S. Cantt. Br, Tangail
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Social Islami Bank Limited Principal Branch, Dhaka Begum Rokeya Sarani Br., Dhaka Narayangonj Br., Narayangonj Rajshahi Branch, Rajshahi Gulshan Branch, Dhaka Mirpur Branch Dhaka Sonargaon Br., Narayangonj Sylhet Branch, Sylhet Uttara Branch, Dhaka Panthapath Branch, Dhaka Chandpur Br., Chandpur South Surma Branch, Sylhet Islampur Branch, Dhaka Dhanmondi Branch, Dhaka Comilla Branch Comilla Khulna Branch, Khulna New Eskaton Branch, Dhaka Mohakhali Branch, Dhaka Agrabad Br., Chittagong Jessore Branch, Jessore Babu Bazar Branch, Dhaka Dania Rasulpur Br., Dhaka Chawk Bazar Branch, Chittagong Rangpur Branch, Rangpur Rampura Branch, Dhaka Foreign Exchange Branch, Dhaka Feni Branch, Feni Barisal Branch, Barisal Banani Branch, Dhaka South Banosree Branch Dhaka
United Commercial Bank Limited Principal Branch, Dhaka Dhanmondi Branch, Dhaka Pabna Branch, Pabna Sylhet Br., Sylhet Nayabazar Branch, Dhaka Banani Branch, Dhaka Agrabad Branch, Chittagong Dinajpur Br. Dinajpur Mirpur Branch, Dhaka Narayangonj Br., Narayangonj Khatungonj Branch, Chittagong Kushtia Branch, Kushtia Uttara Branch, Dhaka Tejgaon Branch, Dhaka Jubilee Road Branch, Chittagong Jessore Branch, Jessore Corporate Branch, Dhaka Bijoynagar Branch, Dhaka Cox‟s Bazar Br. Cox‟s Bazar Khulna Branch, Khulna Gulshan Branch, Dhaka Mymensing Br. Mymensing Maijdee Court Br., Noakhali Bogra Branch, Bogra Mohakhali Branch, Dhaka Faridpur Branch, Faridpur Comilla Branch, Comilla Rangpur Branch, Rangpur Barisal Branch, Barisal Rajshahi Branch, Rajshahi
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New IPO Application Process
1. In addition to the existing IPO application process, applicants can also apply through their Stockbroker/Merchant Bankers in the following process:
Step-1 (Applicant)
a) Applicants other than Non-resident Bangladeshi (NRB) and Foreign applicants for public issue of securities shall submit application/ instruction, within the subscription period, to the Stockbroker/ Merchant Banker where the applicant maintains BO account
b) The application/instruction may be submitted in prescribed paper or electronic form, which shall contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time the applicant shall make the application money available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. Application/ instructions shall be preserved by the same Stockbroker/ Merchant Banker up to 6 months from listing of the securities with exchange.
Step-2 (Intermediary)
a) The Stockbroker/ Merchant Banker shall maintain separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/ Merchant Banker shall verify the availability of fund and if find in order, block the customer account for an amount equivalent to the application money, accumulate all the application/instructions received up to the subscription closing date, deposit the amount in the “Public Issue Application Account” maintained with its bank, instruct the banker to block the account for an amount equivalent to the aggregate application money and to issue a certificate in this regard. In case of application submitted by the Stock-dealer or the Merchant Banker‟s own portfolio, the application amount should also be transferred to the “Public Issue Application Account”.
b) Banker of the Stockbroker/ Merchant Banker shall block the account(s) as requested for, issue a certificate confirming the same and provide it to the respective Stockbroker/ Merchant Banker. The Stockbroker/ Merchant Banker shall prepare category wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the subscription closing date, send it to the issuer both in electronic (text format with tilde „~‟ separator) and printed format along with the certificate issued by its banker.
Step-3 (Issuer)
a) The issuer shall prepare consolidated list of the applications and send the applicants‟ BOIDs in electronic (text format with tilde „~‟ separator) format in a CDROM to CDBL for verification. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not. Along with the verification report, CDBL shall provide the issuer with an updated database of the applicants containing BO Account Number, Name, Addresses, Parents‟ Name, Joint Account Information and Bank Account Information. After receiving verification report and information from CDBL, the issuer shall scrutinize the applications, prepare category wise consolidated lists of the valid and invalid applications, submit status reports of subscription to the Commission and the stock exchanges and conduct lottery in line with the conditions of the consent letter
b) Within 02 (two) working days of conducting lottery, the issuer shall:
i. send the lists of the successful and unsuccessful applicants (other than NRB and foreign) in electronic (text format with tilde „~‟ separator) and printed format to the Stockbroker/Merchant Banker, request them to unblock the amount blocked earlier and remit the amount of successful applicants to the issuers respective Escrow Account opened for subscription purpose.
ii. Issue allotment letters in the names of successful applicants in electronic format with digital signatures and send those to respective Stockbroker/Merchant Bankers. To credit the allotted Page | 152
shares to the respective BO accounts, the issuer shall send consolidated allotment data (BOID and number of securities) in text format in a CDROM to CDBL
Step-4 (Intermediary)
a) On the next working day of receiving the documents from the issuer and issue manager, the stockbroker/ Merchant Banker shall request its banker to release the amount blocked earlier and remit the aggregate amount of successful applicants deducting service charge to the „Escrow‟ account of the issuer opened for the subscription purpose.
b) On the next working day of receiving request from the Stockbrokers/ Merchant Bankers, their bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the issuer‟s „Escrow‟ account. Simultaneously, the stockbrokers/ Merchant Bankers shall unblock the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions.
Miscellaneous:
a) The issuer and Issue Manager(s) shall jointly ensure compliance of the above.
b) The Stockbroker/ Merchant Banker shall be entitled to service charge at a rate of 0.05% on the total amount of application money received by them. The service charge shall be paid by the issuer and deducted by the Stockbroker/ Merchant Banker from the amount of successful applicants while remitting to the issuer. In case of shortage of the service charge, the Stockbroker/ Merchant Banker shall send a bill to the issuer and the issuer shall pay it within 02 (two) working days. The Stockbroker/ Merchant Banker shall provide the issuer with a statement of the remittance amount and the processing fee.
2. The above application process is a pilot project and optional for investors, i.e. investors can apply either following new process through stockbroker/ merchant banker or in existing process through banker to the issue.
3. List of the Stockbroker/ Merchant Bankers participating in the pilot project shall be disclosed in the prospectus and abridged version thereof. Only the applicants maintaining accounts with the Stockbroker/ Merchant Bankers name contained in the list can apply through the new process.
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List of the Stockbroker/Merchant Bankers to receive IPO applications
DSE Stockbrokers
TREC TREC SL.No. Name of TREC Holder No. SL.No. Name of TREC Holder No.
1 A. K. Khan Securities Ltd. 6 44 Mona Finan. Consultancy & Sec. Ltd. 164 2 International Leasing Securities Limited 9 45 Tobarrak Securities Ltd. 172 3 Brac epl stock brokerage ltd. 11 46 T. A. Khan Securities Co. Ltd. 174 4 MAH Securities Limited 13 47 BLI Securities Limited 175 5 Adil Securities Ltd. 17 48 Peoples Equities Ltd. 176 6 Greenland Equities Ltd. 18 49 Commerce Bank Securities and Investment Ltd. 180 7 Royal Capital Ltd. 21 50 UCB Capital Management Limited 181 8 Vision Capital Management Ltd. 24 51 Razzak Securities Ltd. 184 9 ETBL Securities & Exchange Ltd. 31 52 Delta Capital Limited 185 10 Daulatunnessa Equities Limited 37 53 G M F Securities Ltd. 186 11 Haji Ahmad Brothers Securities Ltd. 41 54 Globe Securities Limited 189 12 Rapid Securities Limited 42 55 Eminent Securities Ltd. 191 13 AB & Company Limited 43 56 DBL Securities Limited 193 14 M‐ Securities Ltd. 44 57 Parkway Securities Ltd. 194 15 SAHCO Securities Limited 46 58 MTB Securities Ltd. 197 16 Imtiyaz Husain Securities Limited 50 59 AD Holdings Limited 213 17 Mian Abdur Rashid Securities Ltd. 53 60 Pubali Bank Securities Ltd. 214 18 Shahjahan Securities Limited 64 61 Mika Securities Ltd. 215 19 ASENZ Securities Ltd. 65 62 BRB Securities Limited 220 20 Popular Equities Ltd. 68 63 Modern Securities Ltd. 229 21 Mohammad Talha & Co Ltd. 69 64 IIDFC Securities Limited 238 22 HAC Securities Limited 74 65 A N W Securities Ltd. 240 23 Asia Securities Ltd. 88 66 One Securities Ltd. 241 24 Uniroyal Securities Ltd. 89 67 Apex Investments Limited 7 25 Md. Fakhrul Islam Securities Ltd. 90 68 Alpha Equities Ltd. 56 26 SIBL Securities Ltd. 94 69 IDLC Securities Ltd. 58 27 Salta Capital Limited 95 70 Square Securities Management Ltd. 76 28 Jamal Ahmed Securities Ltd. 97 71 R. N. Trading Limited 78 29 Howlader Equity Services Limited 102 72 Alhaj Securities & Stocks Limited 93 30 Islami Bank Securities Limited 107 73 Remons Investment & Securities Ltd. 108 31 Ettihad Securities Ltd. 110 74 Midway Securities Ltd. 142 32 A N F Management Company Limited 117 75 Investment Promotion Services Limited 158 33 K‐ Securities and Consultants Ltd. 122 76 Oshadhi Securities Ltd. 208 34 Rose Securities Ltd. 125 77 United Financial Trading Co. Ltd. 227 35 Dynamic Securities Consultants Ltd. 126 78 Expo Traders Ltd. 230 36 LankaBangla Securities Ltd. 132 79 Popular Life Insurance Company Ltd. 232 37 Moshihor Securities Ltd. 134 80 Dhaka Securities Ltd. 239 38 Cosmopolitan Traders (Pvt.) Ltd. 146 81 NLI Securities Ltd. 244 39 Joytun Securities Intl. Ltd. 148 82 Shyamol Equity Management Limited 3 40 Shakil Rizvi Stock Ltd. 149 83 Phoenix Securities Limited 4 41 EMES Securities Ltd. 155 84 Crest Securities Ltd. 8 42 Standard Bank Securities Ltd. 156 85 Khwaja Equity Services Limited 10 43 Trustee Securities Ltd. 162 86 Pasha Capital Ltd. 12
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TREC TREC SL.No. Name of TREC Holder No. SL.No. Name of TREC Holder No.
87 ACE Capital Management Service Ltd. 16 141 C-Maart Securities Limited 183 88 Azam Securities Limited 19 142 Jahan Securities Ltd. 195 89 BDBL Securities Ltd. 20 143 Stock & Bond Limited 199 90 Ershad Securities Limited 23 144 Total Communication Ltd. 200 91 Arena Securities Ltd. 25 145 AB Securities Ltd. 201 92 EBL Securities Limited 26 146 Prilink Securities Ltd. 202 93 SAR Securities Ltd. 27 147 Modern Equity Limited 206 94 Sadeque Finance Management Ltd. 28 148 United Enterprises & Co. Ltd. 207 95 Kazi Firoz Rashid Securities Limited 29 149 Mondol Securities Ltd. 209 96 Ibrahim Securities Limited 33 150 Wifang Securities Ltd. 210 97 B & B Enterprise Limited 34 151 Sharp Securities Limited 216 98 Rashid Investment Services Limited 35 152 Rasti Securities Consultant Ltd. 217 99 Quayum Securities Limited 38 153 A. L. Securities Ltd. 222 100 Aries Securities Ltd. 48 154 Mercantile Bank Securities Limited 224 101 S. B. Securities Limited 51 155 Shohrab Securities & Trade Ltd. 225 102 M. Zubair Securities Limited 52 156 FAREAST Stocks & Bonds Ltd. 226 103 UGC Securities Limited 54 157 Akij Securities Ltd. 231 104 Global Securities Ltd. 60 158 Shahjalal Islami Bank Securities Ltd. 233 105 NCCB Securities & Financial Services 61 159 AIBL Capital Market Services Ltd. 234 Ltd. 106 E‐ Securities Ltd. 66 160 PHP Stock & Securities Ltd. 235 107 Sinha Securities Limited 67 161 Premier Bank Securities Ltd. 236 108 First Capital Securities Ltd. 70 162 Bank Asia Securities Limited 237 109 Multi Securities & Services Limited 75 163 Trust Bank Securities Ltd. 242 110 Md. Sahidullah Securities Limited 91 164 BD Sunlife Securities Ltd. 248 111 Dhanmondi Securities Ltd. 98 165 Sterling Stocks & Securities Ltd. 249 112 Island Securities Ltd. 106 166 S & H Equities Limited 2 113 Nouvelle Securities Ltd. 112 167 Federal Securities And Investment Limited 45 114 CMSL Securities Limited 113 168 H R Securities & Investments Limited 72 115 Ahmed Iqbal Hasan Securities Ltd. 114 169 Prime Islami Securities Ltd. 104 116 Nabiul Karim Securities Limited 115 170 PFI Securities Limited 79 117 Murshed Securities Limited 116 171 Ali Securities Co. Limited 105 118 Saad Securities Ltd. 118 172 R N I Securities Ltd. 128 119 Dragon Securities Limited 119 173 Aloco Securities Ltd. 139 120 Sheltech Brokerage Limited 120 174 A.B Ispahani Securities Ltd. 1 121 SCL Securities Limited 121 175 A. R Chowdhury Securities Ltd. 22 122 Shahed Securities Ltd 123 176 B. D Finance Securities Ltd. 30 123 ICB Securities Trading Company Limited 129 177 Bulbul Securities Ltd. 32 124 Thea Securities Ltd. 130 178 Al-Muntaha Trading. Co Ltd 49 125 Harpoon Securities Ltd. 131 179 Green Delta Securities Ltd. 59 126 Kazi Equities Ltd. 135 180 Desa Securities Ltd. 85 127 Securities Broking & Management 136 181 Country Stock (Bangladesh) 99 Services Ltd. 128 Al-Haja Jahanara Securities Ltd. 138 182 ARC Securities Ltd. 100 129 K.H.B. Securities Ltd. 143 183 Alliance Securities & Management Ltd. 137 130 City Brokerage Limited 145 184 Bali Securities Ltd. 153 131 Indicate Securities Consultants Ltd. 154 185 Getway Equity Resouces Ltd. 157 132 Anwar Securities Ltd. 160 186 SES Company Limited (Unicap Securities Ltd. 163 133 Haji Mohammad Ali Securities Ltd. 165 187 Times Securities Ltd. 166 134 Subvalley Securities Ltd. 168 188 Habibur Rahman Securities Ltd. 187 135 Merchant Securites Limited 169 189 IFIC Securities Ltd. 192 136 Shah Mohammad Sagir & Co. Ltd. 171 190 M&Z Securities Ltd. 196 137 Hazrat Amanat Shah Securities Ltd. 173 191 Synthia Securities Ltd. 204 138 Anchor Securities Ltd. 177 139 JKC Securities Ltd. 179 140 Nur-E‐Alam Siddique & Company Ltd. 182
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CSE Stockbrokers
TREC TREC SL.No. Name of TREC Holder No. SL.No. Name of TREC Holder No.
1 Alpha Securities Ltd. CSE 001 43 Skys Securities Limited CSE 084 2 ISPI Securities Limited CSE 002 44 Purabi Securities Ltd. CSE 087 3 Meenhar Securities Limited CSE 003 45 D. N. Securities Ltd. CSE 089 4 South Asia Securities Limited CSE 004 46 LankaBangla Securities limited CSE 091 5 Island Securities Ltd. CSE 005 47 Square Securities Management Ltd. CSE 092 6 Chittagong Capital Ltd. CSE 006 48 Holy City Securities Ltd. CSE 093 7 Saya Securities Ltd. CSE 010 49 Inter-Continental Securities Ltd. CSE 094 8 First Capital Securities Limited. CSE 011 50 PFI Securities Limited CSE 095 9 BREC EPL Stock Brokerage Ltd. CSE 013 51 International Securities Co. Ltd. CSE 096 10 UCB Capital Management Ltd. CSE 015 52 Multi Securities & Services Limited CSE 097 11 Adams Securities Limited CSE 016 53 Mona Financial Consultancy and Securities Ltd. CSE 103 12 North West Securities Ltd. CSE 019 54 Pubali Bank Securities Ltd. CSE 105 13 EBL Securities Ltd. CSE 021 55 NC Securities Limited CSE 107 14 Salta Capital Limited CSE 022 56 Cordial Securities Limited CSE 113 15 Uttara Exchange And Securities Limited CSE 024 57 Hassan Shares & Securities Ltd. CSE 114 16 Be Rich Limited CSE 027 58 Hallmark Securities Ltd. CSE 117 17 RAK Capital Ltd. CSE 028 59 IDLC Securities Ltd. CSE 119 18 PHP Stocks & Securities Ltd. CSE 031 60 Western Securities Investment Management Ltd. CSE 120 19 Sylnet Securities Ltd. CSE 033 61 Far East Shares & Securities Ltd. CSE 123 20 Pioneer Shares & Securities Ltd. CSE 034 62 Amin Securities & Consultants Ltd. CSE 128 21 Hillcity Securities Ltd. CSE 037 63 Phoenix Securities Limited CSE 131 22 S.R.Capital Ltd. CSE 038 64 NCCB Securities and Financial Services Ltd. CSE 132 23 Remons Investment & Securities Ltd. CSE 042 65 City Brokerage Ltd. CSE 133 24 United Financial Trading Company Ltd. CSE 043 66 Shahjalal Islami Bank Securities Limited CSE 134 25 Kishwar Securities Investment Ltd. CSE 047 67 Popular Life Insurance Company Ltd. CSE 135 26 Impel Shares & Securities Ltd. CSE 049 68 Premier Leasing Securities Ltd. CSE 136 27 Mirpur Securities Limited CSE 050 69 Fareast Stocks & Bonds Limited. CSE 138 28 E‐ Securities Limited CSE 052 70 AIBL Capital Market Services Ltd. CSE 139 29 Royal Capital Limited CSE 053 71 SIBL Securities Limited CSE 142 30 Prime Financial Consultants & Equities Ltd. CSE 055 72 Islami Bank Securities Ltd. CSE 146 31 Kabir Securities Limited CSE 056 73 ONE Securities Limited CSE 148 32 Eastern Shares & Securities Ltd. CSE 058 74 British bangla Securities Ltd. CSE 008 33 Reliance Securities Consultant Ltd. CSE 059 75 Chittagong Shares and Securities Ltd. CSE 060 34 CMSL Securities Limited CSE 061 76 Finvest Services Limited CSE 066 35 Prudential Capital Ltd. CSE 062 77 SES Company Ltd CSE 082 36 Associated Capital Securities Ltd. CSE 063 78 Ten Star (PVT. Limited CSE 100 37 Platinum Securities Limited CSE 064 79 Vantage Securities Ltd. CSE 115 38 T.K. Shares & Securities Ltd. CSE 069 80 Green Delta Securities Ltd. CSE 130 39 Ahmed Securities Services Ltd. CSE 070 81 A.A Securities Ltd. CSE 032 40 Sohel Securities Ltd. CSE 076 82 Moharam Securities Ltd. CSE 108 41 International Leasing Securities Limited CSE 080 83 Megacity Securities Ltd. CSE 116 42 DBL Securities Limited CSE 081 84 First Lead Securities Ltd. CSE 122
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Merchant Bankers
Sl.No. Name of the Merchant Bankers Sl.No. Name of the Merchant Bankers
1 ICB Capital Management Ltd. 20 BMSL Investment Ltd. 2 IDLC Investments Ltd. 21 EBL Investments Ltd. 3 EXIM Islami Investment Ltd. 22 AAA Finance & Investment Limited. 4 Imperial Capital Limited 23 PLFS Investments Ltd. 5 AFC Capital Ltd. 24 Sonali Investment Ltd. 6 Prime Finance Capital Management Ltd. 25 IIDFC Capital Ltd. 7 FAS Capital Management Ltd. 26 IL Capital Ltd. 8 Trust Bank Investment Limited 27 Grameen Capital Management Ltd. 9 City Bank Capital Resources Ltd. 28 Alpha Capital Management Ltd. 10 UniCap Investments Limited 29 Rupali Investment Ltd. 11 SBL Capital Management Ltd. 30 Uttara Finance and Investment Ltd. 12 Jamuna Bank Capital Management Ltd. 31 Green Delta Capital Ltd. 13 LankaBangla Investments Ltd. 32 First Securities Services Ltd. 14 EC Securities Limited 33 Southeast Bank Capital Services Ltd. 15 BLI Capital Limited 34 Janata Capital and Investment Ltd. 16 Prime Bank Investment Ltd. 35 First Security Islami Capital & Investment Ltd. 17 AIBL Capital Management Ltd. 36 Swadesh Investment Management Ltd. 18 BRAC EPL Investments Limited 37 BD Finance Capital Holdings Ltd. 19 MTB Capital Ltd. 38 AB Investment Limited
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Additional Disclosures and Clarifications by Management
1. Name wise schedule of interest receivable and interest receivable realized during the period ended on 31 December, 2013
Name wise schedule of interest receivables as on 31 December, 2013 and the amount of interest received have been furnished below: Name wise schedule of interest receivables as on 31 December, 2013
Interest Particulars Receivable on Subsequently Date of Receipt 31.12.2013 received
BSRM Ispat Ltd. 10,972,637 10,972,637 28/02/2014 BSRM Wires Ltd. 576,155 576,155 28/02/2014 Chittagong Power Company. Ltd. 502,400 502,400 28/02/2014 BSRM Logistics Ltd. 6,712,966 6,712,966 28/02/2014 BSRM Recycling Industries.Ltd. 3,518,926 3,518,926 28/02/2014 H.Akberali & Co. Ltd. 49,616,928 49,616,928 28/02/2014 FDR interest 6,596,554 6,596,554 28/02/2014 Total 78,496,566 78,496,566
Interest received during the period ended 31 December 2013
Interest Subsequently Date of Company Name Receivable on Received Receipt 31.12.2012
BSRM Ispat Ltd. 17,750,931 17,750,931 27/02/2013 BSRM Wires Ltd. 4,808,340 4,808,340 27/02/2013 Chittagong Power Co. Ltd. 2,287,008 2,287,008 27/02/2013 BSRM Logistics Ltd. 10,613,772 10,613,772 27/02/2013 BSRM Recycling Inds.Ltd. 9,940,831 9,940,831 27/02/2013 H.Akberali & Co. Ltd. 84,570,891 84,570,891 27/02/2013 BSRM Iron & Steel Co. Ltd. 18,909,472 18,909,472 27/02/2013 148,881,245 148,881,245
2. Subsequent position of liability to PDB
Liability to PDB as on 31 December 2013 has completely been paid off on 28 January, 2014.
3. Poor Liquidity Ratios:
The management has undertaken a BMRE plan to increase the production capacity to 450,000 M. Ton per annum. The renovated plant will go in to production by the end of this year. As the demand for quality MS product specially demand for BSRM product is increasing, we firmly believe that, the profitability of the mill will increase in future. This new mill will supply MS rod, channel, angle, flat bar etc of high quality to the market. Moreover, as the BSRM group is under implementation of setting up a billet melting plant, namely “BSRM Steel Mills Limited”, it will ensure uninterrupted supply of MS billet - the basic raw material for BSRM. BSRM will be free from volatile raw material price fluctuation risk in future. It will ensure stable profitability of the company and will gradually develop its current as well as liquidity ratio.
Dated: July 1, 2014
Sd/- Alihussain Akberali, FCA Managing Director Page | 158
Additional Disclosures and Clarifications by Auditor Relating to the Financial Statements
Compliance of Condition 4 of Commission’s Consent letter dated 16/06/2010 & 19/09/2010:
From our verification and examination of company's books and records we found that all transactions excluding petty cash expenditures were effected through the company's bank accounts.
Sd/- Dated: 19 January 2014 Rahman Rahman & Huq Chartered Accountants
Additional Disclosure by Auditor on the Financial Statements
This is to certify that we, Rahman Rahman Huq, Chartered Accounts being auditor of Bangladesh Steel Re-Rolling Mills Ltd., physically verified the inventories of the company as of 31 December 2013 in accordance with the Bangladesh Standards on Auditing (BAS).
Sd/- Dated: 01 July 2014 Rahman Rahman & Huq Chartered Accountants
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